Motorists are becoming more open to black box technology as they realise the savings that can be had.
Black box (also known as telematics) insurance policies allow insurers to track policyholders’ car usage and driving behaviour to offer a tailored insurance premium. This is achieved by having a small device installed in the car’s dashboard, or alternatively by using a smartphone app.
Interest in black boxes grows by 66%
A recent uSwitch survey found that more than half (56%) of drivers they would now consider taking out a black box insurance policy. The uSwitch car insurance comparison service also saw interest in black box policies increase by 66% between January 2015 and 2016.
According to the British Insurance Brokers’ Association (BIBA) there are now almost 455,000 live black box policies compared to 323,000 in December 2014, an increase of 40%.
On average, drivers say they would need to save at least £89 on their premium to consider choosing a black box policy over standard car insurance. But some drivers can achieve higher savings by switching to a telematics policy.
Savings of up to £1347 for young drivers
While drivers of all ages can enjoy the benefits of a black box policy, young drivers stand to save the most on their premium. Based on quotes generated by uSwitch, drivers aged 18-21 could save an average of £1347 by choosing a black box policy over a standard policy.
Drivers of this age are typically deemed to be the riskiest drivers on the road as they have little experience and are commonly involved in accidents. In fact, around a quarter (23%) of 18-24-year-olds have an accident within two years of passing their driving test. As well as cost savings, industry statistics show a 40% reduction in crash risk when new drivers use black box technology.
Rod Jones, insurance expert at uSwitch, said: “Younger drivers in particular can now prove their worth on the roads, having been penalised by their boy racer peers for years. The little black box can make all the difference. As the technology bases premiums on actual driving habits, not generalised data, careful motorists can enjoy a substantial saving.”
Many drivers still reluctant
But despite the benefits of black box insurance, a fifth of respondents to our survey said they would never take out a policy of this type. Of these, almost half (46%) were concerned that driving with a black box seems too much like “big brother”, and 13% said they don’t want to be monitored by their insurance company.
Commenting on these results, Jones said: “For black boxes to appeal to all, the industry needs to convince motorists about how their personal data is used. Once drivers feel fully assured they aren’t trading their privacy for cost savings, black boxes will be well and truly here to stay.”