What is telematics (black box insurance) all about?
Insurers have traditionally placed people into different groups, such as age, driving experience, marital status et cetera. Blackbox technology was brought out to make premium calculations fairer so that good careful drivers could benefit from lower premiums instead of having to subsidise the bad ones.
How does it work?
The way in which you drive your car is recorded and the information sent your insurer. The factors that they are interested in include:
- How hard you accelerate
- How sharply you brake
- How hard you corner
- How long your journeys are
- What times of day or night you drive
- How well you observe speed limits
The insurance company will score you on all of these points and possibly several others. Whether your premium stays the same, increases or decreases depends on how well you do with the score. At an extreme, cover could be withdrawn completely from a driver whose score was particularly bad.
Does this mean I cannot brake hard in the event of a potential accident?
No, insurers realise that these situations can crop up unexpectedly and the the occasional incidents should make no difference to their calculations. What they look for is a pattern of driving habits.
Why should I buy a telematics policy?
It may well be the cheapest type of policy that you can get. Possibly even the only one. Those who benefit the most are drivers that the insurers consider to be high risk,including young drivers, those with little or no motoring experience, or those with an above-average record of accidents or convictions.
There are other advantages though. If you had a serious accident your device might detect this and not only inform your insurers of the fact but also give your precise location. It may also be designed to act as a tracker to help recover your vehicle if it was ever stolen.
Are telematics a good thing?
They certainly are effective in reducing accidents. Drivers who may be tempted to take risks could be dissuaded by the fact that someone else will be made aware of it and that it could cost them money in the form of increased premiums. Accident rates, including fatalities, particularly amongst young drivers, have fallen over recent years as a result of technological advances such as this.
There is a certain loss of privacy but the companies only store information connected to your driving habits with your permission, which is far less than some of the biggest sites on the Internet already do - without your permission.
Will I have to have a blackbox device fitted in my car?
A fitted box is the most widely used option. A technician employed by your insurer will install it somewhere where it is unobtrusive so it is not going to spoil the interior of your car.
There are also plug and drive systems which plug straight into your car's USB point or cigarette lighter and even apps that you can download to your mobile phone.
What information will be gathered about me?
The systems rely upon GPS technology and will probably relay back information such as:
What times you are driving.
If you are out in your car during the week at rush hour there is an increased risk of minor accidents; and if you are driving at night, particularly at weekend, then statistically that is the most likely time for more serious ones.
What speed you drive at, and on what kind of road.
A speed of, say, 65 mph on a motorway may be perfectly safe; on a twisty, narrow country road it could be downright dangerous. A good telematics system will know the difference.
What driving habits you have.
Smooth acceleration, gradual braking in good time, gentle cornering and staying within speed limits will indicate that you are a careful driver and so less likely to be involved in a claim.
Can I see what my Telematic device says about me?
Most systems allow drivers to access their records online. This means that they can see what they're doing right, and what habits they may have fallen into which should be corrected.
Will the police be informed if I break the speed limit?
Insurers are under no obligation to report speeding, and the evidence they could produce would never stand up in court anyway. Plus it would be a public relations disaster if they were to do so.
Will I have to agree to a curfew?
Statistically, driving during the hours of darkness makes a motorist more at risk of an accident. Very few policies completely exclude this and those that do have to spell it out clearly in the terms and conditions that you can see before you buy the policy. However, it may be one of the factors that could lose you points and if it happened regularly you might find your premium rising.
Can I pay monthly for a telematics policy?
That varies from one insurer to another. The cost of having a blackbox fitted is normally included in the premium and so the insurer may ask for a larger than usual deposit if you prefer extended payments.
Some insurers may even prefer monthly premiums so that they can raise or lower them regularly according to how well they think you are driving. As usual this has to made clear before a motorist buys a policy.
Can I still lend my car to a friend?
Yes, provided that your friend is insured to drive your car for third party risks at least. Remember though that the telematic system will assume that the person who is driving is you, so make sure your friend is a careful driver.