Car insurance Updated:
Would you opt for a car insurance policy that monitored the way you drive? How about if it could save you up to 25% on your insurance premiums? Telematics car insurance policies can offer just that, and perhaps unsurprisingly, they're growing in popularity as a result.
New research from the British Insurance Brokers' Association (BIBA) shows that the number of telematics-based car insurance policies (including "black box" policies) has increased by 39% in the last year, with there being almost 455,000 live policies in December 2015 – up from 323,000 in December 2014.
The younger age group has been the key driver of this increase, and when you consider the potential cost savings, it's little wonder – this form of car insurance can offer savings of up to 25% to those who can show they're safe drivers, and BIBA's figures show that younger drivers (who often find it difficult to find affordable cover) can save over £1,000 in the process.
But just what is this kind of insurance policy? Well, it uses technology that's incorporated into the vehicle to monitor a number of different factors during a journey, such as speed, cornering, braking and acceleration, and even things like the time of day the journey's taking place. This information will be analysed to give a risk profile, and based on that, the driver has the potential to earn a discount on their car insurance premiums – with the safest drivers understandably enjoying the biggest discounts.
There can be additional benefits from having one of these polities, too, with industry data showing that there's a 40% drop in crash risk when a new driver has a telematics policy, which could make the roads safer for everyone. Some telematics equipment can even double up as vehicle tracker devices, which can help reduce theft claims and can act as a safety precaution in the event of an accident or breakdown, as the vehicle could be easily located.
"Telematics is becoming the motor insurance solution of choice among young drivers as they can take control of their own premiums by electing to have their driving behaviour monitored," said Graeme Trudgill, executive director at BIBA. "We are delighted to see these figures increasing; the benefits of a greater take-up of telematics technology are many – more affordable premiums, safer roads, reduced uninsured driving and increased personal safely, because some even operate as a breakdown locator."
Is it time to consider this form of insurance policy? It could well pay off, particularly for younger drivers, so speak to your insurance provider or compare car insurance policies to see if you could cut your premiums down to size.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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