How Social proof and telematics can work together. Use Case: Taxi fleet
Data and technology are changing the way we use insurance, with two big players emerging in the auto insurance industry. Telematics devices, such as the black box installed in cars, allow insurers to see our driving habits. In contrast, social proof based models, such as peer-to-peer, allow customers to pool their resources and share their risk so that drivers can benefit from the best deals.
However, social and telematics don’t need to be rivals; in some cases, they can work together, leading to fewer claims, lower insurance costs for good drivers and safer roads for society. Here’s an example of how this could work using VouchForMe for professional drivers – taxi fleet.
Social proof is the starting point.
Despite their experience, professional drivers have some of the highest insurance costs out of any drivers. According to Park Insurance, the average taxi driver in the UK pays between £1,300 to £1,800. For comprehensive insurance. Compared to an average of under £500 for most drivers. Despite their experience, professional drivers are considered high risk by most insurance companies due to their high mileage and tendency to drive late at night.
Taxi drivers can reduce the high cost of insurance by taking on a higher voluntary excess. Some insurance companies offering excess up to £3000, but before you take on such a high excess, remember that you might be left without a car if you’re unable to cover it.
Use Case: VouchForMe and Telematics
Joe is a taxi driver, like many taxi drivers he’s self-employed, but gets most of his fares through his membership of a regional group of taxi drivers that all use the same dispatcher. Due to his profession, Joe is considered high-risk, and his insurance costs him £1,500 a year. He’s looking to get this down. Fortunately, he knows that most of his colleagues are in the same position and that they are responsible drivers. Together, they sign up for VouchForMe. His colleagues agree to cover a part of Joe’s deductible, should he get into an accident, he does the same for his colleagues, this means they can all afford a better insurance policy.
By agreeing to act as each other’s guarantors Joe and his colleagues set up a psychological bond of trust. Knowing that their friends trust them as responsible drivers, they, in turn, act even more responsibly on the roads, thus reducing the risk of an accident.
What if a member of the group acts recklessly?
Telematics and social proof can work together to monitor the behavior of drivers. Joe and his colleagues can prove their behavior to each other and to their insurance company through the use of monitoring devices, such as a black box and a dashcam. By sharing the data within the group, or with the dispatch company, Joe and the others can see if a member of the group continues to act recklessly, they will then be able to offer extra coaching, or if the behavior does not improve, kick them from the group. Ultimately, by working together, telematics and social proof can help the most responsible drivers get the premiums that they deserve.
Manage a fleet? Lower your insurance costs with VouchForMe
All drivers can take advantage of technology to reduce their car insurance, and both fleet drivers and operators are in the perfect position to utilize peer-to-peer and telematics together. Find out more on our website.
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