Telematics insurance, also known as black box insurance, is a special type of car insurance policy that rewards you for safer driving.
While this type of policy has generally been aimed at new or younger drivers, some providers will allow drivers of any age to apply for a telematics insurance policy, and doing so can help cut down your premiums.
This article will outline how black box insurance works, whether it might be a good idea for you, and direct you to some more ways to keep car costs down.
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Car insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim. Compare car insurance quotes from over 110 UK providers – you could save up to £530* per year.
*51% of consumers could save £529.95 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next five cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from February 2024 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.
How does black box insurance work?
Black box insurance is a type of policy that allows your insurer to monitor your driving. The general idea is that if you keep up safe driving habits, your insurer will offer you lower premiums when you renew, as they will consider you less at risk of getting into an accident.
In order to monitor your driving, your insurer will install a device – the “black box”, or telematics box – into your car, which uses telematics technology to analyse your driving.
It will keep track of things such as how fast you drive, how smoothly you brake and make corners, your mileage and what times of day and night you tend to drive. It will use this data to calculate your “driver score”, which you can check using your provider’s app or website. It may also give you advice or specific feedback on how to improve your driving and boost your score.
With a good enough driver score, your provider may then offer you lower premiums if you choose to renew your policy with them.
What are the benefits of telematics insurance?
- You improve your driving – whether you are a long-time motorist or have only just passed your test, there are always small improvements and adjustments to make when driving. Having a telematics policy not only encourages safer driving habits, but it provides a clear financial incentive to develop them.
- GPS tracking in case your car gets stolen – the black box that is installed in your car uses GPS technology as part of how it monitors your driving. This means that should your car be stolen, it can be tracked down.
- Accident alert – the black box will detect strong impacts to your car, meaning it may be able to detect when you’ve been in an accident. In some cases, the insurer will be able to check on you and call emergency services if necessary. Having telematics data may also mean you have useful evidence if you are involved in a dispute due to a motoring accident that wasn’t your fault.
Is black box insurance right for me?
Black box insurance is typically aimed at younger or more inexperienced drivers – certain insurers only offer it to those aged under 25. If you are an experienced driver in your 50s or 60s without many claims in your history, you may well find a traditional car insurance policy is a more cost-effective option.
However, there are certainly reasons to consider seeking out a telematics policy from the right provider if you are in your 50s or 60s. For example, if you have only recently passed your test or have only just started driving again after a long time, a policy like this could be worth considering.
You might also have particular driving habits that you think could net you lower premiums overall. For example, if you drive less than average or only at low-risk times of day (any time other than rush hour or the middle of the night), this tends to drive your risk factor down considerably.
If you have a history of car insurance claims or a driving conviction, then policies will typically run quite expensive as you will be considered high risk. A telematics policy is a good way of improving your driving or showing that you are capable, which may in turn lower your premiums.
If you are interested in telematics insurance, or just need a new car insurance policy and don’t know where to start, you can compare quotes from over 110 providers using our car insurance comparison tool. Simply enter your details to start comparing.
Other ways to cut car insurance costs
Telematics insurance isn’t the only way you might be able to keep your premiums down. Check out our article 10 practical tips to reduce your car insurance premiums for more ideas.
Or, if you’re looking to reduce your motoring costs more broadly, there might be changes you can make to the way you drive to keep down the amount of fuel you use – read more in our article 11 ways to keep fuel costs down. Finally, our article Ten ways to save on car and travel costs contains an overview on ways to save on travel across multiple modes of transport.