Hear the word data and we think of computers and gadgets. But data is going to be important for the future of driving.
If you've a telematics device installed in your vehicle, it records data about the way you drive. And when insurers access this individual data, they can personalise your car insurance policy.
What's telematics insurance?
Insurers who offer telematics or black box insurance will either add a device to your car themselves, or send you a self-install fixture that measures and records how you drive. Some insurers might just use an app to record your driving.
By tracking your driving, your premium will then be based on how safe and careful a driver you are, instead of the average driver.
How does the telematics device work?
Once the device – usually small enough to fit in the palm of your hand – is installed, it tracks your vehicle's movements using GPS. It usually records speed, distance travelled, and the time of day that you're on the road.
The telematics box or device also monitors your braking and cornering, and the types of road you typically use – such as motorways or country roads – to build up a comprehensive profile of you as a driver.
The data recorded will be used to calculate a more accurate premium for you, either when you renew annually or for monthly instalments, depending on your payment option.
But the data won't be the only thing taken into consideration. Other factors that affect your premium can include:
- Your address.
- How long you've been driving.
- Any no claim discount.
- The voluntary excess you've agreed to pay.
Should I get a black box?
Deciding whether to have a telematics box or device could help to lower the cost of your insurance. Anyone who falls into the groups with typically higher premiums – such as young drivers, and drivers with claims or convictions – is likely to benefit the most by using a telematics device. They have the opportunity to demonstrate that they're safe, responsible drivers.
Even if you're not a young or newly qualified driver you can still benefit from installing a black box device. The data recorded could reduce your premium if it shows that you:
- Avoid driving during busier times, when accidents are more likely.
- Use less busy roads.
- Cover less mileage than you might have initially reported.
Can telematics increase my premium?
Yes. If the telematics device records that you're regularly speeding or driving dangerously, your insurer has the right to increase your premium.
You'll also risk a higher premium if it shows that you're driving late at night and in the early hours of the morning. These times are considered to be when drivers are most likely to have an accident.
Is black box insurance better than a regular policy?
Though telematics car insurance can have many benefits, not every driver will reap the same rewards.
If the telematics device shows you're driving a lot of miles, or driving in any way considered unsafe, your premium might go up.
However, the insurer can't just up your premium without letting you know. First, they'll usually give you an unofficial warning based on their concerns. You'll then have the chance to drive more safely and keep your premium lower.