Telematics or black box insurance explained

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The only way many new drivers can afford to insure their cars is to opt for a telematics, or black box, insurance policy; one FirstCar reader found it cut his premium by a whopping 75%.

Take this route and your insurer will fit a tiny black box to your car that monitors your driving. The box is free, it’s hidden out of sight and it’ll tell your insurer how fast you’re driving, where and when you’re on the move, plus how harshly you’re braking and cornering.

If you’re in a crash, it could even alert the emergency services on your behalf, so they get to the scene more quickly.

What is telematics insurance and what is a black box?

It’s not as though there’s somebody actually monitoring you as you drive though; it’s all done by software, so your driving can be constantly monitored and your premium recalculated on a rolling basis.

It’s not just your insurer who can keep tabs though, as most provide a portal through which you can see for yourself how well you’ve been driving. And because the black box does the same thing as a tracking system, your car can be found more easily if it’s stolen. Plus, if you’re in a crash, it could even alert the emergency services on your behalf, so they get to the scene more quickly.

 

Not all telematics policies are the same though, so it’s worth shopping around before you put your hand in your pocket. Some have night-time curfews, but many don’t, while others have a clause which says that if you move to another insurer after just a year, you could be liable for the cost of the black box. As usual, you must read the small print very carefully before you sign up.

Tom’s story

Tom Mason knows all about the value of black boxes; having been voted one of the country’s best drivers by his insurer, The Co-operative, which claims his driving has been “nearly flawless”.

Says Tom: “When I passed my test a year ago, the insurance premium on my Peugeot 106 was a massive £2700, but I had to pay it if I was to get on the road. Thanks to the black box in my car I’ve been able to prove to my insurer that I’m a safe driver, and only a year after passing my test, my premium has dropped to just £700 – that’s a saving of almost three-quarters. Without the telematics system installed, there’s no way my insurer could have slashed over 70% from my premium”.

Whereas some drivers change their driving style if they’re being monitored, Tom insists that he’d drive just the same without it. He continues: “My dad works for the fire and rescue service and he’s told me too many tales of young drivers killed or injured because of bad driving. So while the black box hasn’t made a difference to how I drive, it has allowed me to buy insurance cover at a price I can afford”.

 

You’d obviously be daft not to consider opting for a telematics scheme for your own cover, but don’t assume it’s automatically the best route; some new drivers can still get cheaper cover with a conventional policy.

You must also check the terms and conditions, as some insurers might not like the way you use your car. For example, some policies restrict you to driving between 6am and 11pm; do any night driving and you could find yourself paying a hefty penalty. But get the right policy and you might just find that the telematics option allows you to get on the road – instead of being priced off it.