If you’re a young driver or don’t have much experience on the road, car insurance premiums can be painfully high – often well into four figures. This is because insurers see certain groups of drivers as a higher risk, and anyone in that group gets clobbered, regardless of how good a driver they are.
One way to get a more tailored premium, and potentially save money on your car insurance, is to choose a ‘black box’ car insurance policy. Here we explain how these policies work.
What is black box insurance?
Black box car insurance, also known as telematics car insurance or pay-how-you-drive car insurance, is a type of policy where your driving is monitored and used to set your premium (along with other factors such as your age and where you live).
To do this, a black box device is usually installed in your car, although some insurers may also offer a plug-in device or a smartphone app. The device will be small – around the size of a smartphone – and will be fitted in a discreet location.
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How does black box insurance work?
Once a black box has been installed into your car, or you have activated your app, it will record how you drive. Items it may monitor include:
- smooth driving – how you brake, steer and accelerate
- times of day you drive
- duration of your journeys
- speed
- types of road you drive on
- cornering
- how many miles you drive.
Always check the metrics your individual policy will monitor, as they will vary between insurers and policies.
What happens if I am a safe driver?
If your data indicates that you are a safe driver, your premium may be adjusted at set points during your policy or when you renew.
You may also be rewarded in another way for your driving habits. As an example, some policies will set a limit of how many miles you can drive over a period of time and will charge if you go over this. Safe driving habits may be rewarded with extra miles.
Admiral, as an example, says: “If you drive safely, you’re more likely to get a discount when it’s time to renew.”
You should be sent regular feedback on your driving, either online or via an app.
What happens if I’m deemed an unsafe driver?
Depending on your policy, your insurance premium may actually increase if your driving habits mean your insurer sees you as high risk, so read the terms and conditions around this carefully. You may also face a one-off charge or even have your policy cancelled in certain circumstances.
As an example, insurethebox says: “We might cancel your policy for persistent or excessive speeding.”
Is black box car insurance suitable for me?
Black box insurance is aimed at groups that are seen as high risk by insurers, such as young drivers, new drivers, drivers with motoring convictions or older drivers.
However, some policies may be offered to younger drivers only, so check the details. Direct Line, as an example, has a policy called DrivePlus black box insurance that is only on offer to those aged 25 or under.
If you don’t fall into a group seen as high risk, you’re less likely to make savings through black box insurance as your premiums are likely to be lower in the first place.
Are there any other benefits to black box insurance?
As well as potentially reducing the price you pay for your insurance, having black box insurance may also offer other perks such as:
- tracking on your car which could help to locate it if it is stolen
- regular feedback on your driving and suggestions on how to improve it
- your insurer may alert the emergency services in the event of an accident.
Will an insurer share the data from my black box?
Insurers must protect your personal data under the General Data Protection Regulation (GDPR) and Data Protection Act 2018. They can be fined if they don’t.
Insurers may share your data with third parties to help with the policy or so you can receive extra benefits or services, but they should explain the reasons for this.
Insurers will not share your data with the police unless there is lawful basis to do so.
Admiral, as an example, says: “Admiral does not inform the police if the data collected suggests you were just committing a speeding offence. We will only share data if a police inquiry is made or a serious incident has occurred.”
What should I pay attention to on a policy?
As with all insurance policies, you should read the small print before committing. Things to look out for on black box policies specifically include:
- Limits and restrictions – some policies may limit when you can drive and will have set charges or penalties if you drive outside certain hours. Some may limit the number of miles you can drive in a certain timeframe, again with charges if you go over this.
- Extra charges – some policies may have fees to fit or remove black boxes. You may also have to pay if you need to switch the box to a new car part way through a policy or to leave a policy early.
- Any age restrictions – some policies may be aimed at those within a certain age range.
- Benefits – compare how the policy you are considering rewards safe driving.
- Penalties – also look at whether you will be penalised for driving that isn’t safe.
Where can I buy black box car insurance?
A number of insurance companies offer black box car insurance, so make sure you shop around to find the best policy for you. To find the most competitive price, it’s wise to compare black box insurance policies alongside other types of car insurance policy too.
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Choose from a range of policy options for affordable cover, that suits you and your car.
