UPDATE: The metrics Fair Pay Insurance measures have been added to the article.

We’ve looked at TomTom’s new business models in the face of free competitors before, and today it’s announcing another new one. In conjunction with Motaquote, it’s launching a new type of car insurance, which includes a free satnav and uses a gizmo that logs how you drive, and assesses how much you’ll pay off the back of that.

Called Fair Pay Insurance, the scheme requires you to install a tracking system to monitor how you drive, logging speed, harsh braking, time and location, G-force impact, cornering, routes and types of roads used. This data is readily accessible online to the driver at any time, and to sweeten the deal, TomTom will throw in a free TomTom Pro 3100 satnav with LIVE traffic info.

The idea, TomTom says, is to reward good drivers with cheaper premiums, assuming you don’t crash, or spend 10 hours a day speeding down the M1.

“This is unlike some other telematics-based schemes where you may have to prove your ability over a number of months,” says Nigel Lombard, Managing Director of Fair Pay Insurance.

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“If you think of your insurance as your car’s MPG, the better you drive, the longer your fuel will last. It’s the same with Fair Pay Insurance, good drivers get more for their money and in that sense they will pay ultimately less.”

The move may seem a strange one at first, until you consider TomTom’s position. The company has struggled to stay relevant in recent years, as dedicated personal navigation devices (PNDs) have been superseded by all singing, all dancing smartphones, often with free turn by turn voice navigation. Premium competitors such as CoPilot have also drastically undercut its own app for iPhone. Its stock price has dwindled from an all time high of €64.80 in late 2007 to €3.68 today.

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Last year, TomTom tried to change the focus of its products and services from simply getting from A to B, to doing it whilst balancing traffic at the same time. Corinne Vigreux, managing director of TomTom’s consumer business unit, told Electricpig last year that even being able to control the flow of just ten percent of vehicles in an area could have a direct impact on average road speed and journey length.

“People are very cynical about traffic, they think there’s nothing you can do about it,” she said. “We think there is a viable way to reduce traffic congestion…there’s a real difference with that’s available today…You can really have a proper load balancing of congestion if you know the speeds on all the roads.”

What do you make of TomTom’s new move? Would you buy into this? Let’s hear your thoughts in the comments.

  • http://twitter.com/squidlr squidlr

    This device will also provide useful data to the Police and other interested parties. All it will take is an information request from the courts, when required. The collected data will also probably be sold to other interested parties. Eventually, you will be required to have one of these things fitted to your car or you will not be allowed to drive as no one will insure you.

  • http://twitter.com/squidlr squidlr

    I wonder when Google Navigation will start uploading driver stats to servers.

    • Anonymous

      Ha, I wonder. What’s in it for Google and its search though?

    • Anonymous

      Ha, I wonder. What’s in it for Google and its search though?

      • http://profiles.google.com/rob.hunter11 Rob Hunter

        Well they could use it for traffic info too. I still think that Google’s navigation app is one of the best out there but it’s biggest shortcoming is the lack of speed-camera data.

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