DRIVERS are no longer rewarded for safe driving by traditional insurers, based on new information.
Specialist telematics firm Insurer Coverbox claims that after the very first two years of no claims most motorists will see their premiums increase, even if they conserve a clean driving history.
In the very first year of no claims a person will get a 26 percent discount however this then increases at a much slower rate.
Using data collected from four major insurers it partners with, the telematics firm, which has an curiosity about highlighting this problem, it discovered that a person with three years no claims could still see their cover increase by 2.7 percent year-on-year on average.
This is because the rate at which car insurance policy is going up is larger than the discounts applied by firms.
No claims discounts can cut an insurance policy by as much as Half. The average auto insurance premium according to Confused.com is lb768 per year.
Telematics insurance coverage is increasingly popular with new drivers because they offer less expensive prices.
They use GPS tracking data to know where, when and how fast you're driving.
For 17 to twenty year olds, fitting a black box can help to save an average of lb202 annually on auto insurance premiums.
The coverage is often tied up with an application that gives a feedback score at the end of a journey.
But drivers must be aware that if they don't keep on the speed and drive safely they could see their premiums go up.
Howard Collinge, director at Coverbox, said, “While the conventional no claims discount provided to non-telematics drivers initially results in good savings, diminishing discounts can be counteracted by rising general insurance prices, ultimately leading to drivers paying more for insurance at renewal even if they continue to drive safely on the highway.”
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