When insurers offer discounts on car insurance premiums based on driving style, as monitored by a smartphone app or a system in the car, this may positively affect driver behaviour. This becomes apparent, for example, in a study by Bolderdijk [57]. If young novice drivers maintained appropriate speeds and this was rewarded by a discount on their insurance premiums, while speeding was penalised by increased premiums, fewer speed violations were observed. The study also showed that they reverted to their former behaviour if the reward was discontinued [57]. A simulator study by Dijksterhuis et al. [58] showed that both direct feedback to the driver behind the wheel and later aggregated feedback resulted in fewer speed violations.
Using such monitoring and feedback systems does pose a few problems: driving style monitoring by means of vehicle movements does not clarify who was behind the wheel; monitoring should be designed in such a way as to guarantee driver privacy; and GPS tracking is less accurate than required [59] particularly near high buildings.
