Insurers can track your driving habits using a black box (or “telematics device”) that is fitted to your car.
Some companies offer rewards and discounts for good driving, while others may charge you a penalty for poor driving habits.
Black boxes are often used by young drivers to get cheaper car insurance.
Here, we explain how black box insurance works.
Black box car insurance is when your insurer looks at your driving habits to work out how much your car insurance policy will cost.
There are a few different ways they can monitor your driving:
Black box: where a device is hard-fitted to your car (that means it needs a professional to install and remove it). It’s usually pretty small – about the size of a matchbox – and can be installed behind your dashboard where you won’t see it.
Mobile app: some insurers have their own mobile apps that can monitor your driving by GPS and accelerometers.
Plug and drive device : where you plug a device into your car’s lighter socket (so you can remove it when you want).
On-board device (OBD): where you plug a device into your car’s OBD port, which is normally under the steering wheel (again, so you can remove it when you want).
You might also hear black box insurance get called telematics insurance (‘telematics’ is the name of the technology they use), smart box insurance, or usage-based insurance.
Insurance companies track your driving habits using a small telematics device or through an app on your phone.
They’ll usually collect information about:
Using this data, your insurer will give you a driving score ranging from 0 to 100.
This score helps them work out how risky you are to insure and how much your policy should cost.
Most black box insurers let you see your driving stats online. If you’re using an app, all of the information should be on there.
You’ll usually get a driving score ranging from 0 to 100.
The better your driving score is, the more money you’re likely to save.
Black box insurance works by rewarding you for driving safely. Rewards vary depending on your insurer but they're likely to do one or more of these things:
It works both ways, though. If insurers see that you don’t drive safely, they could make your cover more expensive.
Or they might even cancel it altogether, for example, if you keep breaking the speed limit or something.
Some insurers make it so that driving at certain times is bad for your driving score.
For example, driving during busier times when you're more likely to have an accident and make a claim.
It’s not that you wouldn’t be insured to drive at those times. But doing so might make your driving score worse. And that could mean the cost of your insurance goes up (or doesn’t go down).
If you decide to get a black box, your insurer will probably have an approved mechanic install it for you.
You’ll usually need to show the mechanic your driving licence and your car’s logbook or V5C form. (That’s just to prove you’ve passed your test and own the car. 🚗)
If you don’t have your car’s VC5 yet, you’ll need another document that proves you actually bought the car.
If you use a plug-in device instead of a black box, there’s no need for installation. You can just plug it into your car yourself.
And if you use an app, you’ll download it to your phone and create an account. You’ll need to make sure you have your phone with you every time you drive.
This depends on the insurance company. Most will pay for the installation, so you don’t have to pay an extra fee.
Some might include the price of installation in the overall cost of your insurance, though.
Ask your insurer if you’re not sure.
You’ll usually have to pay for it to be removed if you cancel your policy or want to have the black box moved to another car.
Drivers that are more likely to get into an accident and make a claim are considered "high-risk" and tend to pay more for car insurance.
This can be a huge issue for young drivers. That's because (statistically) drivers under 25 tend to have more accidents, which makes them riskier to insure.
Black box insurance could help prove you’re actually a safe driver and help make your policy cheaper. Getting it means you can prove you’re actually a safe driver, even though the statistics say otherwise.
It might also be a good option if you don’t drive very much.
If insurers see you don’t get on the roads too often, they’ll probably give you cheaper insurance because you’re less likely to have an accident.
Black box insurance is geared towards helping people in riskier groups save money.
So if you’re not in a high-risk group, to begin with, you probably won’t make many savings by getting it. Like if you’re in your 40s and have built up a no-claims record.
It also wouldn’t make any sense to get black box insurance if you know you’ll find it hard to stick to the rules of your policy.
Don’t forget, insurers can raise the price of our insurance if you break the speed limit a few times. Or if you don’t meet their definition of a ‘safe driver’.
If you drive a lot, black box insurance might not be a good idea for you either. (Insurers see driving a lot as a risk factor).
Here’s a quick summary of the pros and cons of black box insurance: