Drivers have been getting a raw deal on insurance
Many people have suspected it, but evidence is finally mounting that suggests car insurance customers have been getting a raw deal from providers for many years.
A lot of motorists find the industry completely baffling and cannot understand why some people get cheaper rates than other.
Insurers base their calculations on risk and people who they deem to be more likely to be involved in an accident will obviously pay higher premiums.
But how can companies be so sure that a person will crash their vehicle?
Simply put, they can't. Obviously, if an individual has made a string of previous claims, they are a clear risk and their fees will be higher as a result.
However, plenty of people – especially from younger generations – are angry that they are forced to pay huge amounts for cover when they have an unblemished record.
Rightly or wrongly, age has always been a defining factor for the majority of insurance companies and younger motorists tend to be penalised because they are deemed to have a lack of experience.
Thankfully, this is all changing due to the introduction of new technology. Telematics systems are being deployed by a growing number of companies and they allow them to monitor a person's driving behaviour far more closely.
US-based insurer Progressive has managed to analyse five billion real-time driving miles and has been able to calculate much fairer insurance polices as a result.
President and chief executive officer at the firm Glenn Renwick said that drivers who felt the previous system was unfair were "right all along".
"For most, the rates they're paying are higher than the risk they actually present – and in many cases, much higher," he remarked.
"Until now, insurers had no effective way to capture actual driving behaviour and factor that into the rates they could offer," Mr Renwick commented.
Aussies will be hoping that this statistical approach catches on down under, as the cost of motoring has become too much for many people to cope with.
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