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PAYD (or Pay As You Drivetm) is a type of telematic automobile insurance whereby the costs of motoring including motor insurance and road pricing are dependent upon vehicle usage, particularly distance travelled. Pay As You Drivetm is a trademark of Norwich Union The term telematics is used in a number of ways: The integrated use of telecommunications and informatics, also known as ICT (Information and Communications Technology). ...
Auto insurance is insurance consumers can purchase for cars, trucks, and other vehicles. ...
Auto insurance is insurance consumers can purchase for cars, trucks, and other vehicles. ...
Road pricing is term that refers to the charging for the use of streets and roads. ...
A trademark or trade mark[1] is a distinctive sign of some kind which is used by an individual, business organization or other legal entity to uniquely identify the source of its products and/or services to consumers, and to distinguish its products or services from those of other entities. ...
Norwich Union is an insurance company in the UK. It is the biggest life-insurer in the UK, and has a strong position in motor insurance. ...
Economic and Environmental Impact
In economic terms, PAYD can be regarded as a form of context-aware service. Differentiated Service is a design pattern for business services and software, in which the service varies automatically according to the identity of the consumer and/or the context in which the service is used. ...
PAYD has been strongly promoted by environmental and transport groups, mostly as a way of encouraging people to use their cars less.
However, some transport planners have suggested that PAYD could be seen instead as a way of generating funds for building additional roads [1].
PAYD Insurance
Concept The simplest form of Pay As You Drive bases the insurance costs simply on the number of miles driven. However, the general concept of Pay As You Drive includes any scheme where the insurance costs may depend not just on how much you drive but how, where and when you drive.
Pay as you drive (PAYD) means that the insurance premium is calculated dynamically, typically according to the amount you drive. Driving is monitored using a secure black-box device in the vehicle, linked to a national network of satellites and data recorders. The formula can be a simple function of the number of miles you drive, or can vary according to the type of driving or the identity of the driver. Once the basic scheme is in place, it is possible to add further details, such as an extra risk premium if someone drives too long without a break, uses their mobile phone while driving, or travels at an excessive speed.
Insurance companies have always tried to differentiate and reward "safe" drivers, giving them lower premiums and/or a no-claims bonus. However, conventional differentiation is a reflection of past history rather than present patterns of behaviour. This means that it may take a long time before safer (or more reckless) patterns of driving and lifestyle feed through into premiums.
PAYD provides a much more immediate feedback loop to the driver, by changing the cost of insurance dynamically with a change of risk, and this means drivers have a stronger incentive to adopt safer practices. For example if a commuter switches to public transport or working at home, this immediately reduces the risk of rush-hour accidents. With PAYD, this reduction would be immediately reflected in the cost of car insurance for that month.
Potential benefits - Commercial benefits to the insurance company from better alignment of insurance with actual risk. Improved customer segmentation.
- Potential cost-savings for responsible customers.
- Social and environmental benefits from more responsible and less unnecessary driving.
Potential drawbacks - The system recognises only codified, rather than actual, risk. A speeder, for example, would be heavily penalised in comparison with someone who drove in observance of the speed limit. This would not take into account the circumstances involved, eg if the speeding driver in question was driving in an otherwise safe manner, or if the slower driver was changing lanes abruptly, or driving in an unattentive or careless manner.
- Charges would be very high for young drivers, especially at night, and as such would strongly discourage them from driving socially. In many areas public transport is non-existent at night, and such high charges could have a strong negative impact on their quality of life.
- GPS tracking of vehicles, 24 hours a day, could be seen by many people as an unacceptable infringement on their right to privacy.
- The potential of PAYD systems for automated traffic law enforcement could result in a reduction of the use of human traffic police as has been reported since the widespread introduction of speed cameras. This could result in reduced detection of drunk driving and other dangerous offences.
Privacy is the ability of an individual or group to keep their lives and personal affairs out of public view, or to control the flow of information about themselves. ...
A highway patrol is either a police agency created primarily for the purpose of overseeing traffic safety compliance on roads and highways, such as the California Highway Patrol, or a detail within an existing local or regional police agency that is primarily concerned with such duties, such as the HWP...
A red-light camera in use in Beaverton, Oregon A road-rule enforcement camera is a system including a camera and a vehicle-monitoring device used to detect and identify vehicles disobeying a road rule or road rules. ...
Drunk driving (drink driving in the UK) or drinking and driving is the act of operating a motor vehicle after having consumed alcohol (i. ...
Commercial products Insurance companies offering various forms of PAYD include Norwich Union and Progressive Insurance (TripSense). Norwich Union is an insurance company in the UK. It is the biggest life-insurer in the UK, and has a strong position in motor insurance. ...
To meet Wikipedias quality standards and conform with our NPOV policy, this article or section may require cleanup. ...
The current version of the article or section reads like an advertisement. ...
Patents
 Telematics Insurance System from AIOI patent application WO 2005/083605 There are several issued patents [1] and pending patent applications that have been filed worldwide on various inventions related to telematic auto insurance. These include: Image File history File links Size of this preview: 800 × 503 pixel Image in higher resolution (845 × 531 pixel, file size: 61 KB, MIME type: image/jpeg) This is an image from WIPO patent application . ...
Image File history File links Size of this preview: 800 × 503 pixel Image in higher resolution (845 × 531 pixel, file size: 61 KB, MIME type: image/jpeg) This is an image from WIPO patent application . ...
A patent is a set of exclusive rights granted by a state to a patentee (the inventor or assignee) for a fixed period of time in exchange for the regulated, public disclosure of certain details of a device, method, process or composition of matter (substance) (known as an invention) which...
A patent application is a request pending at a patent office for the grant of a patent for the invention described and claimed by that application. ...
- EP patent 0700009 “Individual evaluation system for motorcar risk”
- US patent 5797134 "Motor vehicle monitoring system for determining a cost of insurance" Progressive auto insurance
- jp patent 2002259708 "Vehicular Insurance Bill Calculating System, On-Vehicle Device, and Server Device" Toyota
- wo patent 2005083605"Insurance Fee Calculation Device, Insurance Fee Calculation Program, Insurance Fee Calculation Method, and Insurance Fee Calculation System", AIOI Insurance Company.
Toyota Motor Corporation ) is a Japanese multinational corporation and the worlds second largest[3] automaker making automobiles, trucks, buses and robots and providing financial services. ...
See also Road pricing is term that refers to the charging for the use of streets and roads. ...
Under some patent laws, patents may be obtained for insurance-related inventions. ...
Auto insurance risk selection is the process by which vehicle insurers determine whether or not to insure an individual and what insurance premium to charge. ...
References - ^ Nowotarski, Mark, "Progressive Builds a Fortress of Patent Protection", Insurance IP Bulletin, October 15, 2004
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