What is telematics insurance?

This is a device that is fitted into your car which is commonly referred to as a ‘black box’, for which holds the role of recording speed patterns and distance travelled as well as the type of roads you are using, and when. It can also monitor your braking, which in all detects your type of driving style. From which the data collected is then used by insurers to calculate the cost of your insurance and adjust your premium to its correct value.

What type of drivers do we think are better suited to this device?

• Young drivers

Individuals aged between 17-24 years old, they are statistically the most likely to be involved in a car accident, therefore the premiums can increase dramatically. For instance, according to the Association Of British Insurers (ABI), drivers within this specific age category are three times more likely than drivers of other ages to be responsible for claims.
Whereas, if a young driver was to install a black box, they could greatly benefit from this, because the insurers are able to tailor the premiums to suit everyone based on their driving habits, instead of relying upon the statistics gathered alone to determine the ending result of the cost of their cover. So, overall, if a young motorist can demonstrate responsible and safe driving, the premiums will be lower than they would be if they have opted for a non-telematics insurance.

• New drivers

If you are someone that has just passed their driving test, first and foremost congratulations and enjoy your freedom. However, consider the fact that you may not be the most experienced driver yet, so you would be accounted as a high risk by insurers (regardless of your age). Therefore, installing a black box could work in your favour, because it could help you pay cheaper premiums, as they will strictly be based upon how and when you drive, so again it’s the same principle – the safer you are, the lower your premium will be.

• Low mileage drivers

For those of you who only drive a few miles every so often, it wouldn't be right for you to pay the same insurance premiums as someone who drives 8,000 miles or more a year. For many of the telematics policies, they allow you to choose exactly how many miles you drive per year, therefore they take this data and quickly calculate the right valued premium for you.

• Careful drivers

Now, if you would consider yourself to being an extremely safe driver, a black box premium could potentially reward you with a lower premium.
An example of this type of scenario being, with black box cover with Ingenie, every three months your policy is reviewed and a discount is applied if you’re driving well. Ingenie claims that 70% of its customers have received a good driving discount.
Or another example being the AA’s Drivesafe policy assesses how you anticipate traffic and follow the landscape, so the better you drive, the lower your premiums will be.

• Slow drivers

Speed is one of the few factors that the insurers will assess you on, therefore if you would label yourself as being an individual who isn’t careful with their speed this may not be the correct option for you. For example, if you take corners too sharply and are braking while doing so, this could work against you if you have a black box installed. On the other hand, for those who are careful, again the premium will decrease as the insurers are assessing your driving style.

• Daytime drivers

If you drive late at night or in the earlier hours in the morning, this is considered as a “red flag” to an insurer. This means drivers with black box insurance are likely to see premiums rise if they are regularly driving between these key periods of the day, this could hinder their chances of their premium decreasing in the time for their renewal. Some insurance companies could include a curfew, so you could be fined or see premiums rise. On the other hand, if you tend only to drive during the day, then black box cover could be for you as you will be rewarded for driving during "low risk" periods.
  The drawbacks… Some drivers may feel that they have loss of privacy, as they have the feeling that an extra pair of eyes is watching their every decision they make on the road and that their information that the insurer has gathered, could potentially fall into the wrong hands. Another may be that there are restrictions on vehicle use, as some policies that are offered by insurers involve a curfew, or you may only be allowed to do a certain number of miles (you can pay for more miles if you feel that you’re going to go over your limit).
 
In summary, the “black box” option isn’t for everyone but for those of us that can take advantage of it, then there are good savings to be made!
 
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