Telematics devices, or "black boxes" are often used by young drivers to get cheaper car insurance.
Here, we explain how black box insurance works.
This article is about traditional black box insurance. We've launched a new type of flexible cover which is a bit like black box insurance, but we think it's much better. Interested? Check out our article on smart pricing.
When you get a black box policy, insurers track your driving using a black box (or “telematics device”) that's fitted to your car.
There are a few different types of telematics devices.
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.
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).
The initial premium for black box insurance is normally a bit lower than a regular insurance policy. But once they've fitted your black box, the price can go up or down depending on how well you drive.
Insurance companies track your driving habits using a small telematics device or through an app on your phone.
They’ll usually collect information about:
They use this data to work out how much to charge you for your insurance, based on how "risky" they think you are.
Black box insurance works by rewarding you for driving safely. Rewards vary depending on your insurer, but most will either lower the cost of your insurance, or give you back some of the money that you've already paid.
It works both ways, though. If insurers don’t think that you're driving safely, they'll increase the price.
And if you drive really badly, they might stop insuring you.
Some insurers will also charge you more if you drive at certain times.
For example, if you drive during rush hour, 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).
When black box insurance started, some insurers even had restrictions preventing you from driving at night! Luckily, most providers have stopped doing that.
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 V5C yet, you’ll need another document that proves you actually bought the car.
If you have a plug-in device instead of a black box, you can just plug it into your car yourself.
This depends on the insurance company. Most insurers won't charge you, but some will add an installation fee to your premium.
And if you cancel your policy or want to change your car, you'll usually have to pay a fee.
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, you might not save much (for example, if you're an experienced driver with no convictions, or if you've 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 set their own definition of what a ‘safe driver’ is - so even a few mistakes could raise the price of your insurance.
And 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:
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And when you add smart pricing to your subscription, you could save up to ⅓ on your insurance — without fitting a black box to your car!
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