Black boxes (telematics) offer young drivers a practical way to cut their insurance premiums, while keeping track of how well they’re driving.
There is also the suggestion that this method of analysing how young people drive, will be automatically fitted to cars by 2025.
Currently there are 300,000 cars in the UK that are monitored by a “black box” but since its introduction in 2011 this growth doesn’t look like it will slow down anytime soon. The British Insurers Brokers’ Association say: “Having a telematics device fitted to your car can knock 25% to 30% off policies, saving some young drivers up to £1,000.”
Exactly how does it work?
- Black boxes measure driving in different ways, but most consider mileage, type of road, speed and braking problems.
- Premiums may be adjusted at set points in the policy, based on driving behaviour. With other policies, premiums will stay the same, although you’ll be rewarded with non-monetary benefits.
- Behaviour-based policies aren’t always cheaper, especially if you frequently drive late at night, on unsafe roads or drive poorly.
- Named drivers or others entitled to drive the car will also be used by the insurer to calculate overall performance.
We used a popular comparison site to work out if there was any benefit in taking on a telematics insurance policy. Our example has been based on a 5 year old, 1.0 Vauxhall Corsa, being driven by a 19 year old driver with 0 years experience.
|Company/ insurance provider||Telematics yes/no||Legal Assistance||Courtesy car||Windscreen cover||Based on||Breakdown cover||Price annual|
|Insure the box||yes||yes||yes||yes||behaviour mileage||Yes||£887.64|
|Auto saint with Halfords||yes||yes||yes||yes||behaviour mileage||Yes||£1,156|
|LV- Liverpool Victoria||No||No||yes||yes||N/A||No||£1,411.03|
|Churchill||No||No||yes||yes||N/A||Road side only||£2,196.32|
From this table there is definitely a benefit to having a telematics box inserted and like many insurance companies claim it can save you up to a grand on insurance. However there are some drawbacks of course there always is.
Potentially, this could mean that if a telematics customer wanted to switch insurer at renewal, the new company could refuse to accept their data. Any reductions for careful driving could therefore be lost, meaning drivers may not benefit – as they can with traditional policies – from building up a no-claims bonus.
Some young drivers wont want their driving being put under constant scrutiny. We can understand this; Some may feel that their privacy is under pressure of being taken away. Although for a saving of nearly £1000, you’d seriously have to consider the option.
Some insurers offer a pay-as-you-drive policy that charge for cover per mile, whilst others may impose some restrictions on your driving, such as night-time or early hours curfews with fines for those drivers that break them.