Malta: Telematics Car Insurance

Last Updated: 24 April 2017
Article by Hilary Galea-Lauri

Most Read Contributor in Malta, September 2019

New technology is enabling telematics to gain popularity.

Blackbox Car Insurance, Pay-As-You-Drive or Pay-How-You-Drive are all names used to reference Telematics Car Insurance. It is an emerging technology, where the policyholder can benefit from cheaper motor insurance premiums and is set to change the way insurers currently underwrite new business. 

This is done in four simple steps. In the first instance, the insurer installs a telematics device in the policyholder's car. The device in turn tracks the driving skills of the policyholder depending on their car usage. Thereafter, the data gathered is analysed on a frequent basis, and finally, good drivers will be charged a lower premium. Traditionally, motor insurers used to set premiums based on the data related to the driver, which included the demographics of the driver, claims history, and up to some years ago on gender - although this is now no longer permitted due to the European Union Gender Directive which was implemented in 2012. Moreover, information on the type of car being driven such as the model, power and speed was also required to set motor insurance premiums. 

Telematics devices are usually very small and once installed, they start recording information on the driving behaviour. This feature allows the insurer to determine how safe the policyholder is. Vehicles are equipped with GPS (Global Positioning System) technology which tracks their whereabouts and, in addition, the information recorded by the built-in GSM (Global System for Mobile communication) technology is sent directly to the insurer. The data collected includes: driving speed, total mileage driven, distance travelled, location of the car, type of roads travelled, braking and accelerating patterns, and the time of day when the vehicle was used.

More recently, new technology is enabling telematics to gain popularity. Instead of the traditional manual installation of physical devices, this process can now be done through mobile phone applications which
are much easier to download and install. 

Telematics car insurance was introduced because policyholders felt that they were being unfairly charged for their motor insurance policies due to the demographic segments they fell under. For instance, young drivers were charged higher premiums because they were deemed to be reckless and therefore presented big insurance risks - although there are some exceptions to the rule. 

Therefore, the main benefit of telematics car insurance is that the motor insurance premium is lower for those drivers who show that they are safer on the road than others. Rather than relying on statistics which are based on past trends, premium pricing allows for more individualisation and precision, as individual and current driving behaviour is used. Moreover, as data is made available through online portals, policyholders can monitor their own driving performance and, in a way, control their motor insurance premiums. 

An advantage for insurers is that telematics can enable them to accurately assess and quantify accident damages and therefore help to reduce the number of fraudulent claims. The telematics box will register crucial data about a car accident such as the direction, speed, vehicle position and even the angle of vehicle collision which will help determine whose party is at fault. This is also advantageous from the policyholder's perspective, as claims will be settled more easily and fairly. 

The telematics device also helps to achieve more road safety. Policyholders can be alerted when they brake too hard or drive too fast, therefore prompting them to tame their driving. Also, people may be encouraged to drive more carefully because of the fact that they are being monitored. Moreover, having to pay higher premiums can act as a deterrent for recklessness. Ultimately, all of this will help to reduce road accidents. UK insurance industry statistics show that there is a 40% decrease in the risk of accidents when a new driver has a telematics policy.

Inspite of all these benefits, privacy issues relating to the use of personal data still remains one of the top concerns for most people. Through the use of these devices, insurers are able to track the policyholders and gather information which policyholders may deem as sensitive, such as their location at any point in time. What would insurers do with this data? Share it with third parties? However, aren't most of us already willingly and, at times unknowingly, sharing personal data online? Therefore, are policyholders generally against the use of telematics due to privacy issues or because they are afraid of what the device can and will record?

Developments in the Maltese motor insurance market has seen the introduction of two telematics-based policies by two local insurance companies. These policies take the form of PAYG (Pay-As-You-Go) which is based on mileage and PHYD (Pay-How-You-Drive), which is based on behaviour. Both policies are targeted at young people between the ages of 18 and 30. Looking at different cases from abroad, telematics insurance has been popular not only with the younger cohort but also with older segments of the population. Therefore, introducing these policies to other segments might prove to be beneficial and feasible both for insurers and policyholders alike. In March 2016, the British Insurance Brokers' Association (BIBA) said that telematics policies can offer savings of up to 25% in the motor insurance premiums especially for young drivers.

It is important to note that the use of telematics is only in its early stages in Malta, and thus, one cannot accurately measure the success (or failure) of telematics until sometime has been allowed to pass.

The fast pace of technological advancement, including the phenomenon of driverless cars, is helping with the growth of telematics car insurance. Technology is helping to improve both the effectiveness as well as the costs associated with the use of telematics devices. It is only through the use of telematics that insurers can gather better driving data to be able to priced price insurance precisely for each individual, according to the risks presented.

Originally published by The Business Observer – Times of Malta Supplement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions