What Is Black Box Insurance?

Choosing Black Box insurance can save some motorists up to £200 on their policy according to MoneySuperMarket. Black Box insurance, also known as telematics insurance, was introduced to help motorists get cheaper car insurance as well as encourage drivers to drive more safely.

Car insurance is an expensive legal requirement for motorists averaging at £500 a year, unless you are in a high-risk group, such as young and inexperienced drivers, where premiums can rocket even higher making owning a vehicle almost unaffordable.

There are many aspects of a motorist’s life that can affect the cost of their car insurance premium, including occupation, location and the value of your car. Black Box insurance is an option to help combat these extortionate costs and keep your premiums down.

How does Black Box insurance work?

How does Black Box insurance work

Black Box insurance calculates your premium based on your driving performance. A telematics box will be installed in your car, or sometimes an app downloaded on your phone, to track your vehicles movements and share the data with the insurer. For example, whether you speed, how sharply you break, how carefully you take corners, and how well you drive in general. You can also monitor your driving performance yourself, allowing you to improve and make adjustments where needed.

Safe drivers will be rewarded with lower premiums, whereas if you illustrate bad driving habits your car insurance quote could rise. With this system of how to calculate car insurance premiums, Black Box insurance is a good way to improve the way you drive.

Other than a financial benefit, this technology can assist in accidents offering an objective perspective of what happened. It can also help to detect your car if it has been stolen.

Who is Black Box insurance for?

This kind of insurance policy is becoming more popular, but the group that tends to opt for the Black Box is young and inexperienced drivers. They are considered to hold the highest risk-factor, statistically proven by the fact that “up to 20% of new or young drivers are involved in an accident within a year of getting their licence.” This trend causes new drivers to get hit the worst when it comes to the cost of premiums.

The first year tends to cost the same as other insurers, but it allows motorists to prove to the insurer that they don’t pose a risk and deserve to pay less for their car insurance when they renew their policy.

Who is Black Box insurance for

What are the disadvantages of Black Box insurance?

Sometimes telematics insurance can also hold some restrictions to minimise the risk-factor even more. For example, some policies ban night-time driving as this is often when accidents take place.

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If your chosen insurer uses the app download to track your driving behaviour then this limits your phone usage. If you have hands-free in your car you can no longer use this or any navigation apps; your phone cannot be used at all while driving. You must take your phone with you at all times too. If your phone with the telematics app isn’t with you while you are driving, you’re not insured.

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Mileage can be another limitation. Some insurers provide a mileage allowance. Good drivers can be rewarded with extra miles, whereas bad drivers can have miles deducted.

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You also may need to pay extra to have the tracker installed in your car. Some insurers will install the device for you, and some will send it to you with instructions to install yourself, which could make some drivers nervous about fitting it incorrectly.

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One final disadvantage of Black Box is insurance is privacy. Some people claim that the data collected by the insurers is an invasion of a driver’s privacy, so make sure you read the fine print about what the insurers will do with your information if this is a concern.

What are the disadvantages of Black Box insurance?

Sometimes telematics insurance can also hold some restrictions to minimise the risk-factor even more. For example, some policies ban night-time driving as this is often when accidents take place.

  • If your chosen insurer uses the app download to track your driving behaviour then this limits your phone usage. If you have hands-free in your car you can no longer use this or any navigation apps; your phone cannot be used at all while driving. You must take your phone with you at all times too. If your phone with the telematics app isn’t with you while you are driving, you’re not insured.
  • Mileage can be another limitation. Some insurers provide a mileage allowance. Good drivers can be rewarded with extra miles, whereas bad drivers can have miles deducted.
  • You also may need to pay extra to have the tracker installed in your car. Some insurers will install the device for you, and some will send it to you with instructions to install yourself, which could make some drivers nervous about fitting it incorrectly.
  • One final disadvantage of Black Box is insurance is privacy. Some people claim that the data collected by the insurers is an invasion of a driver’s privacy, so make sure you read the fine print about what the insurers will do with your information if this is a concern.

When searching for your next car insurance policy Black Box insurance has many attractive points to help reduce your premium, but weigh up the restrictions too and find the best policy that works for you.

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