How telematics-based insurance works

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

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.

Top tip

If you’re not convinced, you can give the technology a go without taking out telematics-based cover. Just download the Intelligent Marmalade app from the iTunes store – it monitors all the things that’ll tell you how safe a driver you are, with the exception of speed.