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Black Box Car Insurance – Is it right for you?

Black box insurance policies are becoming increasingly popular due to the rising cost of car insurance, with many drivers opting for this type of car insurance to reduce their premiums. A black box or telematics insurance premium is when the insurance company fits a small device to your vehicle that sends information to them about your driving habits. Good drivers are rewarded with lower insurance costs based on the info provided by the telematics box. 

What is black box insurance? 

Black box insurance will charge you based on your driving style instead of using statistics, so it’s particularly valuable for young or first-time drivers. The usual factors that affect your insurance premiums will be taken into consideration, such as your occupation and age. Your credit score can also affect your car insurance rates. The device fitted to your car is no bigger than a smartphone and sends the data back to the insurer. You can check how you are performing online by accessing the feedback that is sent by the insurer.

The better you drive, the more you can save!

How does car insurance with a black box work? 

If you’ve chosen a black box insurance deal, the insurer will arrange a time for one of their expert team to come out and fit the black box. The telematics box is usually fitted behind the dashboard and uses GPS data from the vehicle and the car’s computer to produce driving data to send back to the insurer. This data determines how safe of a driver you are by recording several driving factors. The information then helps the insurer to set your insurance rates accordingly. 

A telematics device (black box) records:

  • Your speed.
  • The distance travelled.
  • Time of day/night.
  • Harsh or heavy braking.
  • Cornering and steering.
  • Total mileage.
man analysing telematics data

What are the benefits of using a black box for car insurance? 

  • Lower your premium – Black box insurance can be beneficial if you have high insurance premiums. If you are a first-time driver, a young driver, have had claims in the past or have been convicted of a driving offence, opting for a black box insurance quote can reduce the price of your insurance, as long as you drive carefully and sensibly. If you don’t travel many miles a black box can be beneficial. Most companies will allow you to choose how many miles you will travel, and if you underestimate you can buy extra.
  • Spread the cost by paying monthly – Paying monthly is an advantage for many, especially if you find your insurance cost is lowered due to your black box insurance. One of the big disadvantages of car insurance is that pay monthly plans have a higher interest rate than if you pay upfront for the year, so if you save with a black box and pay monthly it can be a huge advantage.
  • Quick and easy if you need to claim Insurance claims are handled much quicker and easier with a black box installed. The data that is collected can be useful when someone is making a claim against you as it can prove how fast someone was going or whether they were driving dangerously.

Are there any drawbacks? 

  • Mileage restrictions and curfews may cost you – If you have a long commute to work and back, you may find that black box insurance isn’t worthwhile as you will end up paying more if you have a limit on your mileage. Curfews that are imposed can also be very restricting if you do shift work that includes driving to and from work at night.
  • All drivers of the car must abide by rules – If you share a car then you will need to consider that all driving done in the car will be taken into account, so whoever you share your car with must also drive in a similar manner and follow all of the conditions that are set out by the insurance provider.
  • They could negatively affect your driving – It has been argued that pay-as-you-drive policies may change your behaviour for the worse whilst driving, as you are focusing on keeping the price of your policy low. If a driver needs to brake sharply, but because a black box is installed they brake softly, it could have serious consequences. However, some companies have argued that you will only be penalised if you are braking heavily repeatedly.

Black box insurance not for you? Check out our tips on finding the cheapest cars for new drivers to insure.