I needed to make drastic budget cuts earlier this year after being retrenched and as I contemplated my expenses, it was difficult to decide how to trim down an already thin budget. Insurance accounts for most of my expenses so that’s where I started. No, I did not cancel any insurance policies – that is always a bad idea. What I did do was shop around to find an insurer who could give me a cheaper premium. Outsurance was not able to do so but Dial Direct surprised me with an insurance premium was R1 300 cheaper than what I was paying.
Towards the end of the call, the sales consultant mentioned that I would have to download an app, which would monitor my driving habits. “Will this affect my premium? And do I have to install a tracker device?” were my first questions. He assured me that my premium would remain as quoted to me but I would receive a refund or discount on the premium based on my driving habits.
I downloaded the app on a Saturday afternoon and by Monday afternoon, I was already more conscious of my driving. And I’m not alone. Bianca de Beer, spokesperson for Dial Direct, says 71% of the top 5 000 most regular app users have improved their driving scores by 30% on average since launch. Dial Direct introduced the driving app in 2017, with the catchy slogan, “Do your thing, get back ching”. De Beer says the best rated drivers have logged 27% less vehicle claims than the poorest rated drivers.
The stats and my experience tie in with research by the pioneer in the field, Discovery Insure. Precious Nduli, Head of Technical Marketing and Vitality Drive Engagement at Discovery Insure, says that clients improve their driving behaviour by an average of 15% within 30 days of joining the Vitality Drive programme and this improvement is sustained over time. “Between 2018 and 2019, we found that 59% of clients improved their driving behaviour with a corresponding reduction in the frequency of motor accidents,” she says.
How are insurers tracking your driving behaviour?
The Dial Direct app is also available to those who are not insured with Dial Direct, simply to monitor driving behaviour – perhaps a handy tool to keep a closer eye on the driving habits of your spouse or child behind the wheel? You also get points for participating in driver challenges.
While both Dial Direct and Outsurance make sole use of an app on your cellphone to monitor your driving, Discovery uses a Vitality Drive sensor, which is installed in your car and interacts with your Discovery’s smartphone driving app. Nduli points out that if you don’t have a compatible smartphone, you can use Discovery’s standalone tracking technology. “Both technologies allow clients to track their driving behaviour but the Vitality Drive sensor and app combination allows for immediate trip feedback following each trip which is better from a driver improvement perspective,” she explains.
Short-term insurance giant, Santam, seems to be lagging the field and requires you to install a tracker device in your car but does not offer any monthly discounts based on driving behaviour. Attie Blaauw, head of personal lines underwriting at Santam, says clients receive a discounted premium when they agree to a tracking device upfront and can use their driving behaviour statistics to negotiate a reduced premium when renewing their policy annually. “We are currently in the process of building a big enough sample database to analyse and ultimately understand the behaviour in order to refine rating,” he says.
Personally, downloading a free app that was instantly accessible on my phone was a win for me. The only downside so far is that I have to remember to mark myself as a passenger when my partner drives my car. While he is generally a more cautious driver than me, his foot seems to get heavy when driving my car! Discovery also notes that if you are a passenger in your own vehicle and use your cellphone, you should mark yourself as a passenger so that your cellphone use score is not negatively impacted for that trip.
How do the apps work and what do you get?
Driving habits that are typically monitored on the Dial Direct app are – harsh acceleration, harsh braking, speeding, phone usage and night time driving.
Needless to say, I started paying more attention to my driving fairly quickly!
Vitality Drive monitors the same and looks at harsh cornering and distance driven as these factors are proven to predict accident risk. Dial Direct offers you a monthly payback of up to 75% of your premium, which is paid directly into your account – in my case, the maximum monthly payback is R740.84 and while the projected payback in the first two days was R246.95, it has since dropped to a projected payback of R123.47.
Discovery Insure drivers are incentivised through rewards such as up to 50% back on fuel spend at BP and Shell or Gautrain spend. Clients also get up to 25% back on Uber spend, Up to 20% discount on tyres and up to 20% discount on car maintenance. Through weekly Active Rewards, clients can also earn Discovery Miles each week for meeting their goal of driving 100 incident-free kilometres. Both Dial Direct and Discovery Insure offer you feedback on every trip you make.
*This article was first published on Moneyweb and has been updated here.