What’s in the Box? Telematics Car Insurance Explained

Quoteline Direct looks at ‘Black Box’ car insurance and asks whether it really is a deal for customers.

Telematics is not new technology, but today it is being put to a new use: calculating car insurance premiums based on vehicle usage.

The ‘black box’ system marries together two pieces of existing kit. The first works along the lines of any tachograph that you’d find in a HGV and records the vehicle’s speed, direction change, time and distance travelled. The data is then linked to an onboard GPS and fed-back to the insurer.

How can telematics cut the cost of cover?

Insurers use software to rate the driver according to how they have handled the vehicle and the time and distance covered. The rating is effectively a measure of risk, and less risk (through careful usage) means lower premiums.

How do drivers find out their rating?

Most telematics schemes feed the information in to an online dashboard that drivers can log in to check their rating at any time. The dashboard also highlights how drivers can improve their rating.

Telematics benefits young driver

Young drivers can cut the cost of their insurance cover dramatically by signing up for a telematics car insurance scheme. Instead of facing a premium based on general ratings for their age and type of car; telematics gives a personal rating that unlocks cheaper premiums for more responsible drivers

What are the drawbacks of telematics?

The good news is that there aren’t any for responsible drivers. However, for younger drivers to reap the rewards they’ll typically be asked to restrict car usage to daylight hours. Although civil rights campaigners have complained there’s an Orwellian odour about having your every move tracked.

How much will a driver save with telematics?

Obviously it depends on the driver and the vehicle usage. However, reports of saving of up to 50% are common and there’s the added bonus of a 20% decrease in accidents in cars fitted with telematics technology.

If you are a young driver and have experience of using black box technology we would love to hear your thoughts via the comments box below. Or you can find out more about telematics insurance in our online guide.


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