Black box car insurance could mean big savings for many motorists
Black box insurance policies, which use telematics technology to monitor your driving habits via an in-car data recorder, could prove the answer for many motorists trying to lower high insurance premiums, according to research just published by What Car? magazine.
The so-called 'black box', which is about the size of a pack of cards and is fitted to your car by the insurance company at no extra cost, constantly assesses your driving style - such as how fast you take corners, or the speeds at which you accelerate and brake. The insurance provider then rewards good driving with either regular refunds or a significantly lower premium when you come to renew your policy. Some providers may also penalise a breach of restrictions, such as late-night driving. Drivers can usually track their performance with an app they can download to their smartphone or tablet.
For teenagers, for whom the average car insurance premium is £2500, an average 30% saving for 17-20-year-olds could make the difference between running a car and having to rely on public transport or their parents' 'taxi service'.
Telematics-based insurance isn't new – insurance provider Norwich Union trialled it in 2004 but withdrew the scheme due to lack of demand. However, with an increasing number of drivers prevented from running a car by the cost of insurance, more and more providers have started using telematics to fill this gap in the market.
Some car manufacturers are getting in on the act, too, offering telematics-based insurance as part of a competitively priced new-car package aimed at young people. The Alfa Romeo Mito, Citroen C1 and Vauxhall Corsa superminis all currently come with such offers. Meanwhile, Autocar Start, a new scheme that helps learner drivers afford a new car, also includes telematics-based insurance.
Telematics for all ages
While telematics-based insurance policies tend to be marketed towards teenagers and young people (who are quoted the highest insurance premiums), some providers offer them to drivers of almost any age - only if your premium is already quite low may the insurer withhold their telematics-based policy, as the cost of supplying and fitting the black box (around £200) may only just be covered by your premium.
Teenagers may be able to make even greater savings if they add one or both parents as named drivers. However, since the black box can't identify who is driving, every driver will need to stick to any criteria such as night-time curfew; families will also need to calculate their combined annual mileage if an overall limit is part of the policy.
For safety's sake
For parents in particular, telematics-based insurance offers a win-win solution to the key concerns about teenagers' driving habits – expense and safety. The AA confirms that having a black box makes you less accident-prone. It says users of its telematics-based policy, Drivesafe, are 30% less likely to make a claim than those who are insured conventionally. Meanwhile, analysis by specialist black box policy provider Insurethebox shows that in-car telematics devices cut the number of accidents caused by young drivers by 35-40%.
Our current pick of …
Black-box policies for young people only
• Direct Line DrivePlus Box (ages 17-20, though motorists of any age can currently use its free DrivePlus app for 200 miles to save up to 10% on their quote for a regular policy)
• Ingenie (ages 17-25)
• Marmalade (ages 17-24)
Black-box policies for motorists of most ages
• AA Drivesafe (ages 17-75)
• Drivelikeagirl ages tbc (17-80)
• Insurethebox ages (17-79)
• The Co-Operative Smartbox (ages 17-75)
Always make sure you check the exact criteria and any restrictions for any telematics-based policy, as each one will differ. Some may also place restrictions on the age or engine-size of the car to be insured, so make sure you have this information to hand when you call for a quote.