Please use this identifier to cite or link to this item: https://www.um.edu.mt/library/oar/handle/123456789/7509
Title: Understanding 'Pay as you go' and 'Pay how you drive' motor insurance policies and analyzing such products in the Maltese market
Authors: Debono, AnnaMaria
Keywords: Automobile insurance -- Malta
Telematics
Liability for traffic accidents -- Malta
Issue Date: 2013
Abstract: Motor insurance is one of the most common types of insurance policies in the Maltese islands. This is mainly because it is compulsory for anyone who owns and drives a vehicle. There are three main types of insurance cover; comprehensive, third party fire and theft, and third party only. The latter cover is compulsory and is the minimum one can purchase as it protects the insured if the driver causes any liability to a third party. This dissertation seeks to highlight the difference between the Pay As You Go (PAYG) and Pay How You Drive (PHYD) motor insurance policies and the usefulness of telematics. It also aims to identify the public's awareness of such policies in the local market. Currently, in Malta, the most common motor policy is the annual motor insurance that provides standard cover and which is unrelated to either the frequency of use of the insured vehicle or the quality of driving of the driver concerned. In recent years in the international market, the PAYG policy has become available. In this type of policy, the policyholder pays a premium according to the mileage driven. There is also the PHYD policy, where the insured pays a premium according to the insured's driving behaviour. This is potentially very advantageous for those policyholders who drive really carefully and who use the vehicle less than the average drivers. Through the responses to questionnaires sent to members of the public, it was established that when compared to the international market, there is a lack of awareness about these two policies locally. If such policies are introduced and promoted by local insurance companies and more awareness is created by iv explaining the advantages and disadvantages of such policies, it appears very likely that a number of insurance buyers will consider making use of either PAYG or PHYD policies. Furthermore, through interviews carried out with officials of two different insurance companies, it was noted that the PAYG policy is already available in Malta as one insurance company offers this type of policy; whereas the other insurance company has incorporated some of the features of a PAYG policy in the existing standard motor policy. The PHYD policy is not currently available in the local market and it appears that insurance buyers are more likely to favour PAYG over PHYD motor insurance. This is mainly because if telematics is introduced, many will be concerned with privacy issues that are created in the process since telematics will hold records about the driver's driving behaviour, locations visited and distance travelled. In Malta, only one insurance company offers a policy that can be said to have some features of PHYD insurance. However, it does not yet make use of telematics but rather relies on the principle of utmost good faith of the policyholder and where applicable, on the Non-Claims Discount Certificate issued by the previous insurer to determine the driver's record. The ultimate aim of this dissertation is to analyse PAYG and PHYD insurance policies from the perspective of the local market. The first few chapters explain how PAYG and PHYD motor insurance policies In the final part of the dissertation, a detailed analysis about the use and awareness of such policies in the local market is carried out.
Description: B.COM.(HONS)INSURANCE
URI: https://www.um.edu.mt/library/oar//handle/123456789/7509
Appears in Collections:Dissertations - FacEma - 2013
Dissertations - FacEMAIns - 2013

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