TomTom, the Dutch manufacturer of automotive navigation systems has made a landmark move into the insurance market by providing the technology behind a new insurance product, which bases premiums on driving behavior.

In the United States, Progressive Insurance offers something similar with its Snapshot monitor.
The scheme gives drivers control over their own policy by using driving ability and behaviour to allocate premiums, rather than risk factors used by insurers such as postcode, gender, and age or vehicle, TomTom said in a statement.

Drivers who sign up for the service will be able to install a TomTom PRO 3100 navigation device, which includes Active Driver Feedback and LIVE Services, into their car. The device will monitor virtually everything about the car and adjusts the driver’s insurance premium accordingly.

Called Fair Pay Insurance, the reward scheme works by harvesting data from your TomTom and offering up a bonus scheme in exchange for good driving.

Harsh braking and cornering, and time spent on motorways or driving at night will all use up the units more quickly and then have an adverse effect on your insurance premium when you come to renew.

“We’ve dispensed with generalisations and said to our customers, if you believe you’re a good driver, we’ll believe you and we’ll even give you the benefit up front,” said Nigel Lombard, MD of Fair Pay Insurance.


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