Monday, February 28, 2011

Insurance, the Oil Price and Speed Limits

Various news sources report that insurance companies will be prevented from offering lower premiums on grounds of gender. Statistically, young women are safer drivers than young men, so females will lose out most, although the addtional uncertainty may mean premiums rise across the board.
Is this good for road safety? Making driving cheaper for the more dangerous drivers must make the roads a more dangerous place, if it means that drivers who were previously priced off the roads due to being a bad risk can now afford to drive.

However, there are other ways for insurance companies to offer lower premiums. Encouraging advanced training could make for safer drivers, lower risk and lower premiums. The use of 'black box' technology to monitor driving, speed and compliance with the law would make it much easier to sort the careful, law-abiding drivers from those who have simply been lucky not to have crashed. 'Black boxes' would also enable blame for crashes to be determined more accurately, putting an end to criminal 'crash for cash' schemes and reducing the number of 'knock-for-knock' or '50-50' claims where there simply isn't enough evidence to establish blame. As far as I can see, none of the media have reported these possibilities - you would think at a time when motoring costs are spiralling, the public (particularly the safer-driving public) would be interested.


Meanwhile, other reports say 'Killer' Hammond is looking at raising speed limits on motorways to 80mph, on the grounds that quicker journey times may boost the economy.
The economic case cannot be very clear-cut. A higher speed limit may simply mean that vehicles get to the bottlenecks quicker and wait longer, particularly at peak times. A higher speed limit will lead to increased national spend on oil and make the economy more oil-dependent - just at a time when the economy is looking vulnerable in terms of energy security. (That's why Spain is going to cut its motorway speed limit - and cut train fares by 5%). Speed, and in addition the speed difference between vehicles is correlated with higher crash rates and increased severity of injuries. Crashes cost the economy a fortune both in the effect of delays, and in the cost of deaths and injuries.  Lastly, coming neatly back to the first theme, more crashes means higher insurance premiums for all!


At least we should be thankful that Philip Hammond isn't (yet) trying to pretend that this isn't going to affect road safety - according to the Telegraph, he said :
"safety might no longer be the sole consideration in judging how fast cars can go and that gains to the economy from shorter journey times should also be taken into account".

4 comments:

  1. Not only raising the speed limit will not achieve much for UK travel times (congestion, bottlenecks etc), but the efficiency of most cars (max MPG) peaks around 60 MPH and goes downhill from there, so more petrol will be used for little to no advantage. I guess that's a way for the exchequer to raise more funds, but there are other ways to do this.
    The Spanish solution seems more sensible.

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  2. My experience of the M6 suggests that most of the time, you'd be lucky to be able to reach the current limit, due to other traffic.

    Hammond really is a dolt.

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  3. Hammond has a point in a purely general sense, in that there is an element of risk in everything and we have to compromise that risk to avoid total paralysis.

    For example, the property damage and loss of life caused by terrorists incidents in the UK in the last decade has been fairly modest - fewer people died in the last decade from terrorism (including 7/7) than the number of pedestrians kiled on our roads in TWO MONTHS.

    So the expenditure on the security apparatus, loss of personal freedoms, detention without charge, presumption of guilt and trials in camera with secret witnesses and evidence might have been better allocated to motoring offences.

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  4. Not only the reason that you have marked above are the main priority for insurance company to offer discounts and cheaper policy but also the make of the car and driving experience do helps a lot in lowering the prices. Also there are schemes that do decides on the basis of how much an individual drives.
    employers liability insurance

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