What could ‘black box’ insurance do for you and your driving habits? If you’re sick of paying out in ever-escalating premiums, are a new driver baulking at the prohibitive cost of insuring your wheels or you’re watching the budget, it could well have something to offer you. ‘Black box’ is the common use term for a telematic insurance policy – with coverage offered in accordance to your own driving style. It can give some useful feedback on safety and money-saving, as well as potentially reducing your yearly premium, and for those reasons it’s definitely worth looking into.
Black Box Basics
Telematics insurance begins when you agree to use your data to inform your insurance policy. The insurer supplied a small GPS tracking monitor which is fitted to your vehicle. This transmits all kinds of information back to them, and they’ll use this to assess your performance as a driver. It’s the same technology that’s used in a fleet management system for commercial drivers, so if you’ve ever had a company vehicle you may already have used it. Some insurers now use a smartphone app as a simpler way to measure your driving. Exactly what metrics are used to decide what premium you get offered are kept secret, and are unique to each insurance company, but in general they will look at factors such as your braking, cornering, steeting, speed, what time of day you drive, the average distance you go and your mileage.
How Do You Get Rewarded?
If you are deemed a ‘good driver’ by your insurer, there’s a reward, and again, this varies from supplier to supplier. Sometimes you will get a certain percentage off your premium returned once you renew your policy – although this does force you into using the same insurer to benefit. Some award a bonus for low mileage and others give you a reward when your policy renews. Meanwhile, for premiums which are based on low mileage, you may receive ‘bonus miles’ as a reward on a monthly or quarterly basis. Bear in mind that there can also be consequences to ‘bad’ driving if you’re on a telematics policy. Some insurers will simply hike up your monthly payments, and some may even cancel your cover – so check the terms and conditions thoroughly before signing up.
Are There Any Hidden Charges?
One thing to be aware of is that black box insurance is subject to a number of potential fees which don’t apply to a traditional policy. For example, if you change your car and you want to continue using your GPS tracker, you may be charged a transfer fee. Likewise, if you have chosen a provider who uses a device rather than a smartphone app, they will contact you to arrange an installation date. Miss this and you’ll get charged for the wasted appointment. When the black box policy ends and you want to switch providers, you may be subject to a deactivation fee. The box is usually disconnected remotely rather than completely removed. There are also all the usual fees associated with traditional policies such as an annual percentage rate on monthly payment options and charges for duplicate documents.
However, if you’re a relatively safe driver and an organised person, but you would traditionally fall into a higher-paying insurance category they can be well worth considering.