Black boxes – can they really bring your car insurance down?
Vehicle insurance has been a legal requirement for anyone driving a vehicle on the road in the UK for almost 90 years. Beginning with the enactment of the Road Traffic Act in 1930, it quickly became the norm worldwide, and has remained relatively unchanged over the decades. But that all changed five years ago.
As the Evening Standard reported recently, March marks five years since the first major insurer in the UK began fitting ‘black boxes’ to customers’ cars. Similar to their namesakes aboard aeroplanes in nature – except they’re intended to monitor usage rather than assist investigators in the event of a crash – black boxes provide a way for insurers to assess accurately the safety and abilities of the driver they insure.
For insurers, this means that they can more accurately predict the possibility of a vehicle being involved in an accident, and it gives them a means of checking that the insured driver is abiding by the terms of their policy. The key benefit for you as a consumer meanwhile is of course lower cost car insurance. But five years on, how successful have they been, and can they really bring your vehicle insurance costs down?
Should you get a little black box?
Black boxes are used to track and analyse the habits of drivers, relating to such on-the-road actions as cornering, average speed, acceleration and braking intensity. The times of day and the types of roads driven on may also be recorded.
Such devices have proved particularly popular with younger drivers, who often struggle to get a competitive deal on their car insurance. In fact, a survey by Consumer Intelligence found that within a year of their introduction, vehicle insurance for under-25s had dropped by 5.5%. It was also revealed that drivers with black boxes, or ‘telematic’ devices, installed, were 20% less likely to be involved in a crash than those driving with a standard insurance policy.
It would appear then that the little black box has fulfilled its goal, both in terms of increasing driver safety and bringing down insurance costs for motorists. And the success story is further evident in the fact that today many insurers offer a telematics-based policy in some shape or form.
Insurance with a difference – black box insurance policies
Black box insurance can vary from insurer to insurer, with some focusing their discounts on specific age groups, such as younger or older drivers. But the premise is generally the same – your driving habits are monitored and a discount applied accordingly.
The reason this has been so groundbreaking is that enables drivers to get insured as an individual, rather than being simply pigeon-holed as a ‘young driver’, ‘old driver’, male or female driver. That means that the chances of you having an accident are assessed more accurately based on your driving behaviour, rather than being based on broad assumptions about your social group as a whole. And with the continuing growth of smartphone technology, there is increasingly no need to actually have the black box installed, with an app being used to capture all necessary data.
Want to know more?
Park Insurance have been helping motorists to get the most cost-effective and reliable insurance for more than 20 years. If you’d like to discuss telematic coverage or any other type of vehicle insurance, please don’t hesitate to get in touch.