Telematics Tariffs: Driving style determines premium

Soon, the insurer could become a constant passenger in many cars on German roads: The new telematics tariffs of car insurance companies are about to make a breakthrough. The individual driving style will determine the amount of the premium for car insurance in the future. Above all, prudent drivers and novice drivers could benefit from discounts on this model.

The car insurance landscape in Germany could go through a digital revolution in the near future. As part of the planned telematics tariffs , German motorists can voluntarily be monitored by their insurers. The driving behavior is recorded technically and the individual driving profile is included in the premium calculation . According to a report of the Frankfurter Allgemeine Zeitung (FAZ), the major German insurance companies are currently working on the introduction of new tariffs for motor insurance.

Telematics tariffs are facing a breakthrough in Germany

While so-called “pay as you drive” tariffs have already been offered abroad for some time, German auto insurers are only just about to break through when it comes to telematics tariffs. So far, Sparkassen DirektVersicherung and Signal Iduna’s Sijox Versicherung have only two providers of “pay as you drive” – ​​but their offerings are aimed at a limited target group. Experts estimate that the monitoring in the car for premium calculation in this country, however, will quickly establish itself as soon as major insurers such as Allianz or HUK Coburg start with it. The two companies are, according to “FAZ”, the largest car insurers in Germany with a total of around 18 million customers in the motor vehicle division.

Drivers can benefit from telematics premium calculation

Using specially installed monitoring boxes in the car , important data such as acceleration and braking distances are recorded and then transmitted to the insurer. In the future, smartphones should make the telematics tariffs possible. Especially novice drivers could benefit from this “pay as you drive” principle. So far drivers license newcomers usually enter the motor insurance with the damage class 0, which means an insurance contribution of about 240 percent of the normal premium. However, if the young drivers use a telematics tariff, they can demonstrate a prudent driving style and thus achieve a discount without many years of damage-free travel. “With the Telematics Tariff, we are making a contribution to road safety , especially for young drivers,” emphasizes Alexander Vollert, board member of Allianz, in an interview with the “FAZ”.

Insurance companies hope for competitive advantages

Many providers expect competitive advantages from the new telematics tariffs. After all, supervised drivers could be offered tariffs that are as accurate as possible, based on the customer’s individual risk of damage – and ultimately cheaper for him than the offers of the competition.

Almost every second person would be able to install a telematics box

The fact that the insurers plan to monitor the driving behavior of the Germans in the future as a passenger does not seem to unsettle them in the hope of low insurance premiums . A survey by CreditPlus Bank showed that 43 percent of German motorists would be willing to have a corresponding monitoring box installed in their car. The German “pay as you drive” pioneer Sparkassen-Direkt-Versicherung promotes the installation of boxes with rewards in the form of discounts on the annual subscription . The savings promised to customers seem so attractive that some insurers already have telematics box waiting lists .

Privacy advocates, however, are skeptical about the development in car insurance. Federal Foreign Minister Heiko Maas (SPD) warns in an interview with the “Handelsblatt” that there must always be an “off button” so insured persons can always autonomously decide on the use of their data.