Cheaper MOT? Yes, but only for those who really deserve it!
In Latvia, we talk about MTPL like the weather – almost always expensive and almost always inappropriately expected. But rarely does anyone ask themselves the uncomfortable question: are we doing everything we can to make it cheaper?
A couple of years ago, we abandoned the Bonus–Malus system – a complex but structured approach that divided drivers into 17 risk classes. Instead, a simpler principle came in, more understandable to drivers, but the purpose remained the same – drive safely and pay less. Logical, understandable and seemingly fair. The fewer accidents, the more attractive the client to the insurer. And an attractive client means one thing – a lower policy price.
However, the reality is still not that simple. Insurers have access to information about accidents, but not information about regular speeding, aggressive driving, or how often someone takes risks on the road without being caught by the police. The result? A driver can ignore the rules for years, but as long as he doesn’t cause an accident, he looks “good” to the system.
And then the absurdity arises – the conscientious also pays for the irresponsible. We would not consider it normal if a bank offered the same conditions to both a reliable customer and one who regularly delays payments. Why do we pretend in car insurance that the risk is the same for everyone?
Discussions about the wider use of violation data have been going on for a long time. The counterarguments are familiar – privacy, regulations, data protection. All of this is important. But the more specific question is whether systematic violation of the rules is really just a private matter? It is not. It is a risk that everyone else ultimately bears. Elsewhere in Europe, this issue is addressed more pragmatically – it is driving behavior that insurers take into account when determining the price of insurance. There, it is not a penalty, but a logical system where safer drivers pay less.
Insurance is gradually moving from “what happened yesterday” to “how you drive today”. Telematics already allows you to analyze driving style – braking, acceleration, speeding, maneuvers. Such systems operate in many places around the world and even here in Latvia, for example, shared cars. The idea is simple – drive responsibly and safely and get a better price.
Italy is one of the leaders in this field, where millions of OCTA policies are based on telematics data. The so-called “black boxes” allow for an accurate assessment of risk and a fair price. As a result, the safest drivers actually pay less. Car manufacturers are also moving in this direction. New cars are already equipped with intelligent safety systems – speed assistants, automatic braking, fatigue sensors. The goal is one – to prevent an accident before it happens.
The Latvian Motor Insurers' Bureau, as one of the most successful innovators in the insurance sector, is also analyzing opportunities and working on various solutions to encourage Latvian drivers to "share" their driving habits data. Discussions have been initiated with several public and private partners, however, the implementation of full-fledged solutions is expensive and time-consuming. It is expected that with the expansion of artificial intelligence capabilities, many previously seemingly unattainable ideas could be realized, and in our country too, "smart telematics data" could become a practical tool in pricing OCTA policies.
Of course, the use of data should be voluntary and transparent. But if a person proves that he drives safely, why shouldn't he pay less? Ultimately, the question is very simple – do we want a system where safe driving is rewarded? Or one where everyone pays the same, regardless of whether one drives responsibly for ten years, while another regularly takes risks and breaks the rules?
We often say that we want cheaper MTPL. But in reality, it often means one thing – for someone else to pay for us. But the essence of insurance is not equality. It is safe and responsible behavior on the road. The more accurately we assess the risk, the fairer the price will become, and the safer the roads will be for all of us. Maybe it's time to stop looking for reasons why it can't be done, and start thinking about how to do it? Cheaper MTPL doesn't start at the insurer's office – it starts the moment you start the vehicle.