Aimed at young drivers, black box insurance can reduce the cost of your premiums and improve your driving habits. We explain what black box insurance is and how you can use it.
Your car insurance costs are rising. This is due to several factors, including increased claims over the past year and rising repair costs.
As a result, according to Greg Wilson, CEO of comparison company Quotezone, younger drivers are being hit hard.
“There are ways to keep costs down, especially when it comes to insurance, fitting a telematics device or black box is ideal for new drivers or those who drive fewer miles than average,” he said.
In this article we explore:
The best telematics insurance policies
Defaqto, an independent rating agency, has rated the best telematics insurance policies on the market. We have listed these offers below:
What is Black Box Insurance?
Also known as telematics insurance, black box insurance is a modern way to cover your vehicle. It does this by using a device called a black box to monitor and rate your driving habits.
Insurers then use this information to determine your renewal premium. If you’ve proven to be a responsible driver, you’re likely to get a lower premium, but if you record a bad driving record, your premiums could go up.
This is a type of insurance that is often aimed at young drivers who, unlike their more experienced counterparts, have yet to prove that they have a good track record.
How does black box insurance work?
Previously, insurers would send or install a black box for your vehicle. But that has changed with some providers, such as Direct Line, making their telematics coverage available through their app instead.
No matter how you install it in your car’s black box, the black box ultimately judges your driving ability. This is achieved by measuring several factors (listed below).
Many of the black boxes allow you to see your score during the rule, so you can get real-time feedback on your habits and areas for improvement.
This is often done by downloading the insurer’s app or finding a statement on your online account.
Telematics not for you? How else can I lower my premium?
According to Greg Wilson, CEO of Quotezone, a comparison site, thoughtful upgrades to your car could lower your premium, such as adding a camera or tracking device.
“Savings can also be made if young drivers can pay annually and shop early, the optimal time to get the cheapest deal is usually three weeks before a new policy starts,” he said.
To explore other ways you can reduce your risk to your car insurer, read our guide.
What does the black box measure?
When determining your driving score, the black box will take into account:
- Speed – Consistently driving over the speed limit will lower your score
- Acceleration – Speeding up and then braking suddenly is a sign of bad driving. Driving easy and at a constant, acceptable speed will have a better effect on your score
- braking – Short, sharp braking will have a negative effect on your score. So try to anticipate when you will need to slow down the vehicle
- Turning – Some black boxes even rate how well you’re cornering, so avoid cornering incorrectly
- Using a mobile phone – These devices can also detect when you are using your mobile phone, even when it is hands free.
Is car insurance cheaper with a black box?
According to Quotezone, telematics policies are on average £75 cheaper than their standard policies for 18-24 year olds.
A typical telematics policy for this age group averaged £1,155 in 2023 compared to £1,230 for those without a device.
These average figures are based on 100,000 different policies.
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Is black box car insurance worth it?
“Telematics rules are not good for everyone,” said Mike Powell, insights consultant at data provider Defaqto.
“But if you’re a careful driver and are happy to let your insurer monitor your driving habits, they could be right for you.”
As mentioned, black box premiums are often cheaper than standard car insurance policies – and this is what makes them attractive to some drivers.
At the same time, they can also prove to your insurer that you are a safe driver and when your policy comes up for renewal, this can further reduce your risk. Under a standard car insurance policy it may take longer for your risk profile to reduce to that extent.
The Association of British Insurers (ABI), the trade body, said another benefit of telematics insurance is that it can provide unique safety and security features.
For example, some black boxes will automatically notify emergency services in the event of an accident and, since the black box is actually a tracker, it can make it easier to track your vehicle if it’s stolen.
What are the disadvantages of a black box?
Due to data protection laws, telematics insurance providers cannot transfer your black box data to other insurers. This means that when your policy comes up for renewal and you’ve shown you’re a good driver, your current provider can only use that information to lower your premium.
Additionally, if your telematics policy is covered by the app, you’ll need to factor in data charges. Direct Line says their app uses around 60 megabytes (Mb) of data to drive 1,000 miles at 40mph.
To put that into context, that’s about the equivalent of driving from London to Dundee and back.
The Marmalade app has roughly the same data usage, using 500 kilobytes (kb) for every hour of driving.
This may seem insignificant to some, but for others with a limited data plan, it could be a problem.
Cheap car insurance for young drivers without the black box
If you’ve decided a telematics policy isn’t for you, our guide outlines other ways young drivers can reduce the cost of their premiums.
We also list some of the best car insurance providers here, all shortlisted in the Times Money Mentor Awards last year.
FAQ
Where is the black box placed?
If you need to install your black box manually in your car, then your insurer will mail you the device or send a technician to install it in your vehicle. If they send you a device, you’ll probably need to plug it into an electrical outlet in your vehicle, like a cigarette lighter.
What happens to the black box when my policy expires?
If your black box can be easily removed, you can discard it when your policy expires and you will no longer use it. Otherwise, your insurer may send a technician to remove it from your vehicle.
Will my insurer share my information?
No, your information is protected by privacy laws. This means that if your telematics device catches you speeding, it won’t automatically pass it on to the authorities. However, if the police approach your insurance agency with legal permission to access your information, they will hand over your records.
The ABI said that if an insurer is found to have shared your personal information, it could face a fine of up to €20 million.
What happens if someone else drives my car?
Most insurers allow you to control the black box via an app. Here you will be able to notify your black box when you are driving the car and not when other people are using your vehicle.
Other black box policies do not differentiate between the drivers of your vehicle. So be careful who you let drive your car because their habits will affect your score.
