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GPS a short acronym for Global Positioning System is a tool that helps in determining or locating a position by use of radio waves and a satellite or satellites. According to Max (2010) this device gives position in any part of the world regardless of the time of day or the kind of weather. The GPS has found many applications in the world today and is easily accessible considering that it is available in smart phones.

Insurance companies are using the GPS technology to insured vehicles. A box containing a modem and a GPS receiver is installed in the vehicle to be installed. Bartlett (2008) says that GPS continually monitors the position of the vehicle, distances and time of travel. It uses this information to calculate insurance fee to be charged. The vehicle owner is charged more if he/she uses the vehicle late at night or early in the morning.

"Pay as you go" is a phenomenon based on usage insurance. Barltlett (2008) observes that the cost of this automobile insurance depends on the type of the vehicle, place, time and distance. Pay as you go insurance based system can be classified into three coverage categories: the first being odometer reading, the second is based on number of minutes recorded by data transmitted via radio frequency technology or a cell phone; the third is coverage based on other types of data like speed, distance, time travelled and time of day.

The premium cost can be calculated from the number of miles driven, type of driving or the driver identity. Extra details like risk premium due to long distance driving with no break, travelling at excessive speed or using a car phone while driving can also be factored in. Under this insurance scheme, there exists Telematic usage based insurance where a driver is instantly fed with information concerning the change of cost of premium. The cost of premium changes with change in risk and therefore a driver is able to practice safer driving practices.

GPS has got its way into various professional applications. Apart from pay as you go, GPS finds its application in land survey, in cellular mobile networks for synchronization of base transmitter stations (BTS), tracking prisoners, tracking stolen phones, protection of lone workers and locating farm animals.

According to Bartlett (2008) the Telematic system costing is based on the speed the driver is driving at. The driver might be charged unfairly since he/she might be driving faster but safely as compared to a slow driver who changes lanes abruptly or drives in a careless manner. Since the insurance is prepaid, the person being insured stands to lose since the Telematic system is not able to identify highways, rural roads or a city street. Continuous Global Positioning System (GPS) tracking infringes on a person's privacy. The journey made by a person at each interval of time can be determined and exposes the privacy of people; some couples have used the technology to expose cheating spouses.

Apart from security, GPS, in many ways is helping to decongest roads. The Government is also using this technology to manage traffic. This automated pricing is ensuring that the actual use of the road is charged fairly thus being sensitive to the general population and drivers are thus encouraged to have good road behavior. The GPS technology seems to be a very good device but it does not work well when indoors.  Bartlett (2008) observes that GPS technology is prone to interference emanating from electromagnetic waves from electrical and electronic systems in our surroundings. Acquisition of a weak signal due to widespread attenuation is almost impossible and therefore further improvements are needed to make the device more reliable.

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