Car insurance Updated:
Black box car insurance has been around for a while now, but it seems that few people are realising the benefits. Research from Admiral has looked at why uptake has been so slow, and much of it seems to be due to misunderstandings around how the whole thing works.
Let's start by looking at what black box (or telematics) insurance actually is. In a nutshell, the policy requires you to install a device in your vehicle that monitors things like your speed, braking, mileage and cornering ability, and even the number of journeys you make and how many rest stops you take on long trips, to determine how safe and skilled a driver you are.
If you're safe, you could get a reduction in your car insurance premium, so for this reason they're particularly popular among younger drivers – this demographic is generally assumed to be higher risk and they often pay far higher premiums as a result, so if they can prove to the insurer that they're less of a risk, they could make great savings.
Given the potential benefits, it's surprising that so few drivers actually take up the offer of black box insurance. There's a clear reluctance to get involved, and Admiral's research shows that this could be because a huge number of motorists are misinformed.
For example, 12% mistakenly believe that insurers will tell the police if the driver has been speeding and will pass on data from the black box as proof, while 30% think that insurers share the data with other providers and 17% think that the data is stored forever, none of which are true (at least in Admiral's case).
As well as confusion around how the data is recorded and used, there's also widespread misunderstanding about how and where the black box tracks a driver: one in 10 drivers surveyed think that the insurer would tell their parents or partner where they've been driving, and one in three think they'll be tracked in real time and that the black box "is just a way for insurers to see where they are" – 89% of younger drivers who didn't want such a policy said it was because they didn't like the idea of being tracked.
Others are concerned that their insurance premiums could be increased if they make a mistake: 27% believe that premiums will be affected if the driver swerves or brakes heavily to avoid a collision, when in fact the driving score is based on the overall standard of driving – not individual instances – so drivers will only be penalised if they repeatedly brake heavily, for example.
However, some of the myths are even stranger, with 9% thinking it'll drain the battery and 4% believing it can turn down the stereo, while 5% even think it can record conversations in the car. "While we can only speak for Admiral LittleBox, none of these misconceptions are true," said Jo Garcia, head of telematics at Admiral. "It's a shame that so many people believe them, especially if they are stopping them for trying black box insurance.
"One thing which is clear from our research is that many motorists simply don't understand how black box or telematics insurance works… The benefit of black box or telematics policies is that they help insurers price their premium based on how you drive as an individual, not how your peer group drives. Young people who drive safely can really benefit from the discounts offered and get much cheaper insurance."
The benefits really could make the whole thing worthwhile, and once people start to realise that a lot of those myths are just that, it's hoped that more drivers will get on the black box bandwagon. Many still don't know anything about it – a third of motorists, according to Admiral – so it's time to get educated! If you're a younger driver, speak to your insurer about the options, and find out more about this potentially beneficial kind of insurance.
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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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