How do black box and telematics insurance devices work?

If you're a new driver it can be difficult to understand the world of car insurance and the options available. Like most types of insurance policy, no two black box policies are the same. 

But there are some unique features that set black box policies apart from other policies, which we explore in depth below. 

When you first past your test, whether you're a young driver or have just had driving lessons, it’s expensive to buy insurance. That’s because insurance companies don't have any information about your driving history. So you’ve no proof to show them that you are a careful driver.

However there are some options which can help you find the best and cheapest car insurance for new drivers. These are generally known as telematics insurance, sometimes referred to as black box cover.

In brief:

The best way to find cheap car insurance is to think about how and why you use your car, and how often you are likely to need cover.

Black box car insurance policies can feature a small device an insurer installs in a policyholder’s car to measure their driving behaviour. This is known as telematics car insurance. While there are types of black box insurance policies that don't deploy this device, the name is shorthand for any device that records your driving style.

Black box insurance policies base insurance premiums on actual driving behaviour. For this reason: 

The traditional black box and telematics car insurance policy involves a small device installed in the car to monitor driving behaviour. The box is about the size of a mobile phone and usually installed out of sight behind the car’s dashboard. 

This black box, with the help of several internal sensors, automatically records your driving without you having to remember to switch it on. 

So what happens if you decide to opt for a black box policy?

Most installed black boxes can also act as a tracker and can make it easier to retrieve your car if it's stolen. Some installed black boxes also offer accident alerts which tell the emergency services your location if they detect you’ve experienced a serious impact.

Self-installed black box policies work in the same way as installed boxes, by recording your driving behaviour. As the name suggests, a self-installed black box is a device you install yourself. These black boxes are also known as plug-in or plug-and-drive devices and are usually provided by your insurer direct. 

More information to help you make your decision:

Some insurers track your driving behaviour by using an app installed on your mobile phone. You don’t need to have a device installed by your insurance company, simply follow your insurer’s instructions to download the app to your smartphone.

Need to know more?

As well as different types of device, insurers also measure and reward good driving behaviour in different ways. Many telematics boxes track acceleration, braking, cornering, and journey time, enabling insurers to take these factors into account when working out the cost of your annual premium. 

With most policies you can monitor your driving behaviour online, or via the app. Some insurers will offer rewards and discounts for drivers that demonstrate safe behaviour on the roads. With statistics showing that young drivers are more likely to have accidents and make insurance claims than any other age group, this age group is also likely to benefit most from black box car insurance.

Drivers using their cars outside of peak traffic hours could also save, as some insurers charge less for miles driven when the roads are emptier and accidents less likely.

Let’s, then, summarise the types of black box policy typically offered:

Pay as you go policies: Your policy will be mileage-based and you may be able to earn or pay for ‘top-up’ miles. These policies are ideal for drivers with limited mileage. Drivers belonging to so-called high-risk groups, such as young and elderly drivers, are often hit with hefty premiums, despite some using their cars infrequently. 

While pay as you go car insurance has until now been associated with black box insurance policies, innovative companies have begun to offer ‘true’ pay as you go car insurance cover. Normally, drivers are charged a set amount per year and allowed to drive a certain number of miles before being charged extra. 

Some pay as you go car insurers allow you to top up in bundles of miles which you can roll over to the following year if unused.

Rewards-based policies: Your driving will be measured and you’ll be rewarded for consistent positive behaviour. Your insurer may evaluate your driving monthly, annually or quarterly, and you could receive refunds on your premium or even rewards such as free pizza or coffee.

No claims bonus builder policies: Your behaviour will be assessed throughout the year with the aim of offering a tailored premium when it comes to renewal time, and the idea is that this will be more affordable based on your driving score. This is a good option for new drivers or those who want to build up a year of no claims.

What does a black box record? Each policy is different, but most black boxes will record:

They’re popular among young drivers, but can be beneficial for other drivers, particularly those who only do limited mileage or those in other high risk categories, such as drivers with previous claims or driving offences.

For many, black box insurance offers a cheaper alternative to a traditional car insurance policy.

Insurers increasingly take the view that if you’re willing to have your driving monitored you’re less likely to take risks, so will likely offer you a lower price than traditional insurers if you’re in a high risk group.

While some telematics providers offer fixed premiums, others will regularly review your driving behaviours and could offer you a refund on your premium if they judge you a consistently responsible driver.

But bear in mind some insurers can ‘fine’ you or put your premium up if you’ve demonstrated bad driving behaviour – but you should be able to monitor your performance and your insurer will advise you of how to improve your score before they charge you.

For fitted black box policies, your insurer will arrange for your black box to be installed by a professional fitter at a safe location, usually within 14-28 days of the start of your policy (although you will be covered as soon as your policy begins).

It should take less than an hour to fit the device in a discreet and secure place, usually in or near your dashboard. You will need to provide the following documents to the technician before the device is installed:

The cost of the box and installation is included in the price of your premium. But if you want to change your car during the policy, you may have to pay for installation of a new box (see ‘what if I change my car?’).

If you share your car, you should be aware that all their drivers’ behaviour will be recorded and count towards your driving score (with the exception of app-based policies).

It’s also important to remember that everyone who drives your car must have adequate insurance cover - they must be either named on your policy or have their own comprehensive policy that includes cover to drive other cars, or have temporary insurance in place.

When black box technology first came into use, most telematics insurance policies were curfew-based, meaning drivers could be fined or have their premiums increased if they used their car after a certain time of night.

Some policies still work in this way, but the industry has moved on from these tactics after concerns that young drivers were acting dangerously to finish their journeys before curfew.

None of the black box policies available via Uswitch are curfew-based, but night-time driving may affect the driving score for some policies, you’re advised. Do check.

Some telematics devices can detect when your car is involved in a crash. An alert will be sent to your insurer if the device detects an impact over a certain measure of force. The insurer can then contact the emergency services and inform them of your location if they believe you’re in danger.

Insurers can also use the telematics data to determine the cause of an accident and who is at fault, which could make the claims process easier.

Depending on their circumstances and how often they drive, yes. But much depends where a driver lives and their vehicle, type and condition. It’s always worth getting a quote. 

Most installed boxes can help to locate your car in the event that it is stolen. The police can work with your insurer to determine the location of your car based on black box data.

If you get a new car during the term of your policy, your insurer will deactivate the box in your current car (for fixed boxes) and will arrange to install another box in your new car. Some insurers will do this for free, but other insurers will charge up to £150. So check before buying. 

If you decide to change insurance providers, your box will be switched off and the original insurer will not receive any more data from your car. You can also request to have the box removed from your car, but you may be charged a fee for this. Again, check.