Third-party insurance for a car can be quite expensive. In particular, novice drivers often pay high premiums. Insurance companies’ offers that promise a significantly lower rate if drivers install an app that records all driving data sound tempting. If they can use it to prove that they drive particularly carefully, the discount is often up to 30 per cent. However, the German Federal Financial Supervisory Authority (BaFin) advises that you should check such offers carefully, as they can also have disadvantages. For example, if you are often on the road in rush-hour traffic, often pass accident blackspots or like to drive fast, you are unlikely to benefit from a discount. In some cases, it could even be more expensive, according to the BaFin website. (BaFin | Telematics-based insurance)
Poor marks for night-time driving
The technical term for this type of insurance is telematics tariffs. They have different names depending on the insurance company, but they all work the same way. Technical devices such as a sensor in the car and an app on your smartphone are used to record driving behaviour. The information forwarded to the insurance company includes how fast someone is driving, how quickly he or she accelerates and how often he or she brakes. All of this is included in an evaluation. Other factors are also included, such as frequent trips in the dark—considered risky—or during the day on the motorway, which is considered fairly safe. Those who drive carefully and avoid risks get a good rating and a discount on their insurance the following year. From the ADAC’s point of view, telematics rates are particularly interesting for young drivers, who usually have to pay a lot of money in the no-claims bonus system.
A lot of data collected
The BaFin admits that the tariffs have advantages because they encourage drivers to drive as carefully as possible. But it also mentions disadvantages, including a very mundane one: ‘Telematics apps consume data volume’. The consumer advice centre warns: ‘However, a telematics tariff means that the insurance company is keeping a close eye on your behaviour. And you will have to pay more if your driving behaviour is not to the insurer’s liking.’ Consumer advocates also point out another problem: ’If an accident has occurred or someone accuses you of driving too fast, the data collected can be very useful: insurance companies, the police and other parties involved in the accident could want access to the memory of your GPS device. If the data does not match your own perception, you could run into trouble. If you don’t want to report minor accidents to the insurance company, the company may still know about them,’ says the website (Verbraucherzentrale | Telematik-Versicherungen). It can also be difficult if a car is driven by several people with different driving styles. Anyone who takes out such a policy also discloses a lot of data: it also records where someone is driving to, where they are staying overnight and when they arrive home.
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Autoverkehr auf den Straßen Tübingens. Foto: tuenews INTERNATIONAL / Mostafa Elyasian.
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