Car insurance companies are planning to offer young drivers the opportunity to install a surveillance camera in their car, and in exchange receive a discount of 15% on their insurance.

Oliver Philippou, Analyst, IMS Research (IHS Inc.)

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I recently read a news article on the BBC website about how car insurance companies are planning to offer young drivers the opportunity to install a surveillance camera in their car, and in exchange receive a discount of 15% on their insurance. However, this is not a new idea. So why is this not common practice by insurance companies already?

The use of cameras onboard commercial vehicles in exchange for reduced insurance premiums has been common practice in the U.S. for many years. Traditionally, whether it is a taxi, bus, or train, onboard video surveillance systems have been used to protect passengers, staff and the vehicles against acts of crime and anti-social behavior. However, another key benefit of onboard video surveillance is to monitor the passengers and drivers for legal mitigation or protection. There is a strong case for companies installing onboard video to protect themselves or their drivers against liability cases and frivolous laws suits. This is common practice in the commercial world of commuter buses and road freight, especially in the USA, and is becoming more common in the UK as well.

Mobile video surveillance is also used in fleet management and driver management solutions. These systems can track vehicle location and speed. An accelerometer triggers the video recording when an incident, such as a sharp turn, a crash, sudden acceleration or deceleration happens. The solution is normally set to record for a short period of time before, during and after the event.

The main aim of these solutions is to alter a driver’s behavior, to improve driving style and reduce risk of accidents. Not only does this reduce insurance premiums, but as drivers know they may be being watched, they tend to drive more calmly. This also offers financial benefits such as, increased fuel efficiency and decreased maintenance bills.

So why is it not being used more commonly within the UK? It is surprising that fleet management companies, car insurance campaigners, road safety campaigners, and camera manufactures have not lobbied more rigorously for this.

At a cost of around $388 for the camera, this may put some end-users off. However, compared to the potential reduction on insurance premiums this could offer a significant return on investment for younger drivers.