Black Box Car Insurance Explained

With expensive car-insurance premiums hitting motorist’s hard, particularly younger drivers, a new form of policy is growing in popularity.

The idea behind black box car insurance is to reward careful driving with a cheaper insurance premium.

This unique kind of policy requires a black box recorder to be placed inside the car’s dashboard. The device then monitors various elements of your driving and transmits the data to the insurance provider via satellite technology.

At the outset of the policy, drivers are quoted an average annual premium, which includes the cost of installation. However, the premium is then adjusted – often monthly – depending on the information produced by the black box, with the better scores in a range of categories producing a lower premium.

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Driving Data Recorded

The black box records details such as the time of day or night you drive, the roads you use, your speed, acceleration, cornering and braking. It will also pick up details of an accident in order to provide the insurance company with the information to produce a more detailed report.

There are now 180,000 drivers in the UK using black box technology for their insurance policy and that’s a 15-fold increase in the last three years.

Young Drivers Could Benefit

One of the main advantages of the system is to reward careful motorists when they might otherwise pay a higher premium which is based on their age or the area in which they drive.

This is the reason why black box car technology is most popular among younger and inexperienced drivers, who pay much more for their car insurance than older people. The cost of premiums for drivers aged 17-22 has increased 40% in just over two years, with young males paying around 40% more than females of the same age.

Traditionally, insurance policies didn’t discriminate among younger drivers and safer motorists aged 17-22 were ‘unfairly’ expected to pay as much at the outset of a policy as those who were less careful. With black box technology, this need not be the case and research has revealed that young drivers who have a black box policy can expect to pay around 50% less.

As well as younger drivers, students and elderly motorists could benefit from black box technology. Anyone who has a low annual mileage could take advantage of it as it’s thought the more miles you drive, the likelier you are to make a mistake.

It has also been argued that this form of policy would also improve the quality of young drivers on the road as it removes the temptation to break speed limits and drive recklessly.

However, critics suggest the black boxes are too expensive to install as they often cost hundreds of pounds and don’t bring the cost of premiums down quickly enough.

But it appears black box car insurance policies are here for the foreseeable future, with industry experts predicting there could be around half a million cars with the technology installed in them in the next two years.

Article by Mark Martin

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