Telematics car insurance canceled due to false speeding tickets and not driving ENOUGH

Faulty technology, no driving for a month and missing emails are just some of the reasons why telematics-based drivers have suddenly canceled their car insurance, complaints show.

Telematics software is used by many car insurers to monitor how motorists drive and adjust their premiums accordingly, offering a big discount for safe road use. This tracking relies on a ‘black box’ mounted on a car, the technology in a driver’s smartphone, or a combination of both.

These insurance deals are most common among young drivers, who can spend 10 percent of their salary on car insurance because insurers consider it riskier.

But many drivers have been caught out by the fine print, which can lead to policies being canceled seemingly out of the blue.

This has a disproportionate impact on young drivers, as they must notify prospective insurers of the cancellation, which could further increase their premiums.

Drivers report having their telematics policy canceled for seemingly minor reasons, such as not driving for 28 days, missing a warning email, turning off Bluetooth on their phone, low phone battery, and telematics technology not working properly .

These cases emerge from the 2024 decisions of the Financial Ombudsman (FOS) for unfair cancellations, 35 of which were upheld in favor of the consumer.

Why is the telematics policy being cancelled?

For example, insurer Advantage canceled the policy of motorist Mrs. T because her car had not registered any trips for 28 days.

Advantage is an insurer owned by insurance broker Hastings and used by Hastings Direct for its YouDrive telematics policy.

The 28-day clause is a common requirement in many telematics policies, as insurers would argue that long periods of no data being received could be a sign of a car being driven without recording being possible, nor does it provide an opportunity to underwrite the risk. In many cases the notice period is only seven days.

However, in Mrs T’s case, she was simply traveling abroad without her car, which was stationary.

The cancellation came as a shock because Advantage only relied on sending emails that ended up unread in a spam folder.

She argued that she was left without insurance, with a “stain on her character,” and would now have to pay more for coverage. She also said she had to travel by public transport.

The FOS said Advantage had acted unfairly and should have tried harder to communicate before canceling the policy. The ombudsman ordered the insurer to delete all records of the cancellation and pay £250 in damages.

In a second example, also at Advantage, the car insurance of motorist Mr. K canceled due to the 28-day clause. Again, he simply hadn’t driven his car much, and the FOS sided with him.

In another example, West Bay Insurance was found to have wrongly canceled a telematics policy due to “excessive speeding,” which was actually a technology error.

The insurer recorded the driver, Mr F, driving at speeds of up to 185 km/h and tore up his policy.

But these recordings couldn’t possibly be accurate.

Firstly, his car only had a 1 liter engine and, according to the manufacturer, could reach a top speed of 160 km/h. Secondly, Mr F’s car was also recorded making journeys of up to 60 kilometers at a speed of less than 16 km/h, an incredibly slow speed.

West Bay realized in February 2024 that it had incorrectly recorded Mr F’s driving style when he recorded a speed of 220 km/h, but subsequently canceled his policy in March anyway.

The FOS ordered West Bay to cancel Mr F’s outstanding fees, pay a partial refund, pay £250 in damages and delete all records of the cancellation.

In another example, insurer Ageas rejected a claim on a telematics policy because it believed the driver, Mr A, was driving without his telematics black box connected.

This policy required Mr. A to install an app on his phone that would connect to a physical telematics box permanently mounted in the vehicle.

The policy also required that his phone be charged to at least 10 percent battery during each trip and that Bluetooth be turned on, both common features of many telematics insurance contracts.

The ombudsman concluded: ‘On balance I am more than convinced that there was a problem with the operation of Ageas’s telematics device’ and asked the insurer to pay the claim.

What insurers and brokers say

An Advantage spokesperson said: ‘If a customer does not adhere to the terms of the policy – ​​which are made clear during the purchasing and onboarding process – the policy may be cancelled.

‘One of the most common reasons customers are canceled is driving while using a mobile phone. We communicate with customers in many different ways (email, text and letter) to notify and discuss any cancellations with them, but we recognize that in some cases confirmed by the FOS our communication could have been better .

‘We are always looking to improve our customer experience, with some of our processes having been improved since these cases.’

An Ageas spokesperson said: ‘Ageas’ current telematics insurance offering is sold through brokers as we do not sell or service the devices fitted to a telematics policy. We are currently working with our broker partners to investigate the issues raised here so that policyholders understand what they need to do to ensure their telematics policies are valid.”

A West Bay spokesperson said: ‘West Bay Insurance takes customer service very seriously and we are always concerned when we hear that a customer has had a bad experience. We are investigating what happened in this case as we want to ensure policyholders receive the best service.”