British drivers are missing out on billions in savings by overlooking ‘black box’ insurance policies, according to uSwitch research. Black box policies (also known as telematics) use a small device fitted in the car or an app on the driver’s mobile phone to monitor driving data. The insurer can then offer tailored prices based on actual driving behaviour, including miles driven, time of day, speed and braking.
With the average car insurance policy now at an all-time high of £690 a year, careful drivers could save up to £145, and young drivers could save even more — up to £372 a year, by taking out a black box insurance policy.
Barriers to switching
British motorists are already in the habit of shopping around for cover, with 93% comparing car insurance policies before renewing or switching. But while more than half of policyholders (54%) believe black box policies are cheaper, only 5% have adopted the technology.
A third (36%) of drivers who have switched to a black box policy found that the cost of their car insurance has decreased, with careful drivers able to save up to 21% by using a black box. But despite this, almost half (47%) of British motorists who don’t have a black box say they wouldn’t consider taking out a telematics policy.
Around half of these drivers have concerns about being tracked when driving (49%), while 43% wouldn’t switch because they’re loyal to their current insurance provider (43%). More than a quarter (28%) said they wouldn’t want to pay to have a black box fitted, despite this not being an additional cost.
According to the survey, drivers currently on a standard insurance policy say they would have to save over £85 to consider taking out cover with a black box. But with savings of £145 possible with black box technology, many drivers seem unaware of the actual cost benefits.
More than cost savings
As well as the potential savings on offer, UK motorists are also often overlooking the additional benefits of such policies. Almost half of UK drivers (46%) are unaware that a black box can be used track your car if it’s stolen, 48% aren’t aware that it can locate you if you are in an accident, and 38% don’t know that black box insurers offer rewards to good drivers. Astonishingly, over a quarter (27%) wrongly think that everyone who has a black box policy is subject to a curfew and can only drive at certain times.
Young drivers are the most likely to feel comfortable with black box insurance, with almost a quarter (23%) having already switched compared to only 2% of over 55s.
Rod Jones, insurance expert at uSwitch.com, says: “The savvy British public are always looking for ways to save a few extra pounds on their bills. This is especially in car insurance where costs have soared by a fifth in the last year.
“With savings of up to £145 on offer when installing a black box and the added benefits that this technology brings when it comes to safety and theft, we’re encouraging drivers to take time to research black box policies and see if the new technology could help drive down the cost of their policy. The money saved could instead be put towards essential car maintenance or paying off other household debts.”