Black Box car insurance cheaper for youngsters: Telematics Explained


Spy-in-the-car black boxes are predicted as the next big thing to help young drivers buy cheap car insurance.

The electronic gizmos about the size of a smart phone sits under the dashboard gathering real-time information about how a driver handles their vehicle and feeds the data back to a control centre where the results are analysed.

The result is a score – and that figure is translated in to a monthly price for car insurance cover.

Different insurers base their scores on similar data, like:

  • Speed – the box links driving skills to speed limits by plotting routes on a sat-nav
  • Acceleration and braking – an assessment of driving aptitude
  • Cornering too fast – another aptitude assessment
  • Time of driving – late night or early morning driving is penalised

The aim is to encourage young drivers to stick to speed limits and drive more carefully with the reward of cheaper car insurance as the prize for sticking within the rules.

Drivers can look at their scores by logging in to a personal page on the insurer’s web site.

One of the leading telematics insurers is the Co-op, who signed up 10,000 young drivers to their black box scheme during 2011.

With youngsters paying out an average £3,000 a year for comprehensive car insurance, any help with cutting costs is welcome.

These costs are predicted to rise from June as insurers scrap gender linked quotes – which is likely to mean car insurance may increase in price for women as their cover is brought more in line with men.

David Neave, director of general insurance at the Co-op, said: “Our data shows that the vast majority of our customers are responding to our ‘carrot’ rather than ‘stick’ approach and are improving their driving skills because they are rewarded for doing so.”

Several insurers offer young drivers black box car insurance.

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