Black box insurance is great for careful drivers who are frustrated by the high cost of car insurance.
And if you’re a young driver and get penalised with high premiums, despite being a sensible driver, black box insurance could help. In fact, drivers aged 17-21 could save an average of £1,392 by choosing black box insurance over a standard policy (based on quotes generated by uSwitch between May and July 2016).
Black box car insurance counts the miles you’ve driven, so you only pay for what you use.
What is black box insurance?
The technology works by having a telematics box fitted in your car or by using an app on your mobile phone. The box or app links to a satellite to measure your usage, allowing you to check your own driving online.
Black box insurance technology measures everything from acceleration to cornering, so your insurer can get a comprehensive impression of your driving habits and charge you accordingly.
Typically drivers are charged a fixed premium with a certain number of miles allowed per year, however some policies work by refunding drivers for good behaviour and increasing the premium for poor driving scores.
Some black box insurers work more like mobile phone contracts, so you top up in bundles of miles depending on how much you’re driving (which is why it’s sometimes called ‘pay as you go insurance’).
Who is black box car insurance for?
The figures show that young drivers are more accident prone, and hence more likely to claim on insurance than other age groups.
Consequently, if you are a safe driver under 25 you will probably benefit most from black box insurance policies.
The latest research shows that young drivers between 17 to 21 pay more than £1,240 for their insurance (AA British Insurance Premium Index July 2016) — black box insurance is a sure way to bring that figure down, providing you’re a safe driver.
It’s not just young drivers who can benefit from black box insurance. If you use your vehicle outside peak traffic hours there’s a good chance you could save, with insurers charging less thanks to the emptier roads.
The advantages of black box car insurance are simple. As your premiums are almost entirely dependent on the amount you drive, driving less is an easy way to save and build up your no claims record.
This also means the likelihood you will be in an accident will decrease, with the insurance industry estimating that black box insurance decreases accidents by 20%.
Some black box insurance policies could even help to save your life if you do have an accident. Certain telematics devices can send an accident alert to your insurer if a sudden stop or impact is detected. Your insurer will call you to check if everything’s okay, and if they can’t get in touch they can alert the emergency services and inform them of your location.
Black box car insurance can also benefit the environment, as it makes you more likely to choose public transport instead of the car, particularly if it means your premium will increase or you will exceed your mileage limit.
What’s more, if your car is stolen, fitted black boxes can act as a tracker so you can retrieve your vehicle.
Types of black box insurance
Most black box insurance policies work on the same premise, by basing premiums on actual driving behaviour. However, the benefits offered by insurers can vary. Some types of policy offer refunds or extra mileage allowances for good driving, whereas others will base your renewal premium on the driving behaviour you’ve demonstrated over the year.
There are three different ways insurers can measure driving data\: a black box device fitted in the car, an app on the driver’s mobile phone, or a self-installed device that typically plugs into the car’s 12V socket.