Telematics May End Postcode Lottery For Coverage
Archaic systems? Area prejudice? Feeling hard done by? The UK population is currently stuck in a time warp which all began in the 1950’s. 1959 to be precise. The Royal Mail rolled out national postcodes which feature on every street in London and every road in the UK.
This was a great development for us couriers and allowed for parcels and post to be delivered quicker but its knock on effects have had unintended consequences. House prices are often judged by the postcode they reside in. Insurance for homes and cars are quoted by postcode and even new tech like satellite navigation finds postcodes useful… why?
It is surely time to move away from such a system which is great for delivering post, but should it really be used to allocate a quote for courier insurance or ascertain the value of a property? The problem comes into a finer magnitude when areas are compared against each other.
A street in London may well offer cheaper contents insurance than a property in Leeds, but the house could be worth seven times as much. This would simply be down to the crime rate in the area. On the other hand, the same house in Leeds, which is situated next to another house in another postcode may differ in the hundreds of pounds in comparison, even though they are feet apart.
It’s a similar situation with cars. Park your car outside the house in Leeds and it may well cost you twice the amount it would cost in a more secure area of London. While telematics hasn’t been devised for homes yet but could in the future, the technology is certainly making a difference in the car insurance market.
What Is Telematics?
Perhaps you’ve heard on the news that when a plane crashes it holds data on the flight within a little black box. It is this box which they search for to determine the reasons for the crash and who was at fault. Well now they have a little black box for your car.
You no longer need to rely on the postcode lottery for a quote. Now you can install a telematics device, a black box, and it will record information ascertained from your daily driving.
It then automatically sends this data to the insurer, from which they can find out how good a driver you are, when and where you drive, how fast and a whole range of other minute details to provide an overall picture of what risk you are to them as an insured party.
Why Is Insurance A Postcode Lottery?
While insurance will still be partly based on a postcode lottery because crime statistics will still be reported on such a basis. This small amount of tech may well enable more to be rolled out in the future.
And with self drive cars on their way in the next ten years, you may well not need to worry about your cover at all but until then, reduce an insurer’s reliance on random postcode data and get assessed and receive a quote based on your abilities as a driver to offset the lottery.