Is a black box car insurance policy for you?

A telematic, or โ€˜black boxโ€™ policy could cut the cost of your insurance, but only if youโ€™re the right type of driver

Words By Claire Evans

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Telematics car insurance monitors your driving either via an electronic box thatโ€™s fitted inside the car, or in some cases a smartphone app, which feeds information back to your insurer.

Sometimes that means the cost of insurance can drop if the box sends back a glowing report to the insurer, in other cases the reward can be extra miles to top up a fixed-mileage policy.

Black box policies are often aimed at young drivers, but theyโ€™re available to other motorists, too.

How does a black box decide if Iโ€™m driving well?

The box uses GPS positioning and a motion sensor to look at a variety of factors to determine if the car is being driven safely.

Sticking to the speed limit, steady acceleration, smooth and progressive braking and gentle cornering are rated as good driving traits, while stamping on the throttle or brake pedal and hurtling round corners like a wannabe racing driver are bad.

Other factors the insurer may keep an eye on include the number of miles driven, the type of roads driven on and the time of day the car is used.

The insurer builds up a bespoke risk profile of the driver that should be much more accurate than relying on the usual general measures, such as age, and driving experience.

Typically the insurer doesnโ€™t keep this information to itself. Regular feedback is available through an app or via web portal, whch drivers can use to check how well they are driving and make changes to keep the black box happy.

How much could I save with a telematics policy?

Young drivers in particular (and their parents if they are paying the premium) stand to benefit.

Telematics policies are often cheaper from the word go than a standard policy. Hastings Directsโ€™ SmartMiles scheme is available to drivers aged 17-25, and the company says SmartMiles customers typically save 39% on their premium compared with a conventional Hastings Direct insurance policy.

Premiums can also go down as a young driver builds up a history of good driving. Unlike some policies, SmartMiles premiums are not adjusted mid-term, but good driving is rewarded at renewal time.

Ingenie, another telematics insurance provider for 17-25 year olds, says 70% of its customers earn discounts for driving well, with the premium reviewed once a quarter.

However, itโ€™s important to remember that with many telematics policies (including Ingenieโ€™s) premiums can go up as well as down based on feedback from the black box.

Are telematics schemes just for young drivers?

Although young driver policies form the core of the black box market, there are telematics policies for other drivers. Some, like Drivology, are for over 25s only.

Others are available to a broad section of drivers. Aviva Drive is for all drivers, and it uses an app thatโ€™s available on iOS and Android smartphones instead of a unit fitted to the car. According to Aviva, 44% of drivers score between 7.1 and 10 out of 10, earning an average discount of ยฃ150.

Itโ€™s important to note that the Aviva app will run automatically whenever the smartphoneโ€™s GPS detects movement. So a driver could get a score for their next train journey. So Aviva encourages its drivers to check all the automatically recorded journeys are really theirs.

What are the drawbacks of a black box policy?

For drivers with a blemish-free insurance history and several years of no-claims bonus behind them, a telematics policy could work out more expensive than a conventional insurance policy. There are also likely to be restrictions on mileage and night time curfews, especially on young driver policies.

On top of this an increasing number of insurance providers have introduced admin fees for making changes to policies mid-term. These added costs could wipe out any savings, so check up front for the cost of adding drivers or changing address, surname or job title. Hereโ€™s our round-up of insurance companies' fees:

Ins company Cancelling fee Changes to policy (eg: name, address, job title)
1st Central ยฃ50.00 ยฃ30.00*
Admiral ยฃ49.50 ยฃ19.50
Allianz ยฃ50.00 ยฃ15.00^
Aviva ยฃ38.00 ยฃ18.00^
Axa ยฃ52.50 ยฃ10.00^
Churchill ยฃ53.76 ยฃ26.50
Co-op Ins ยฃ50.00 ยฃ15.00
Direct Line ยฃ48.16 Free
Esure ยฃ55.00 ยฃ26.00
Hastings Direct ยฃ45.00 ยฃ25.00^
Liverpool Victoria ยฃ40.00 ยฃ10.00
More than ยฃ50.00 ยฃ25.00^
Zurich ยฃ25.00 ยฃ25.00

*ยฃ15 for online changes; ^Free for online changes

Do black boxes encourage safer driving?

Up to a point, yes, but thereโ€™s more to safe driving than simply keeping the box happy.

If black boxes are to make a significant impact on road safety, they need to be used in tandem with advanced driver training, such as an or course.

Click through to the next page for page 4 of our complete car insurance guide

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