How a black box could cut your insurance costs

Young drivers often face such steep insurance costs that it is impossible for them to get on the road at all.

Driving car

Statistically, younger drivers have more accidents that more experienced motorists, and are therefore considered much higher risk by insurers.

However, one way young drivers can keep premiums down is to consider ‘black box’ insurance, otherwise known as ‘telematics’ or ‘pay as you go’ insurance.

Here, we explain how this type of cover works, so that you can decide whether it could be the right choice for you.

How black box insurance works

The insurer monitors your driving habits using a ‘black box’ so that it can tailor premiums to suit each individual, rather than relying on statistics to determine the cost of cover.

The black box monitors things such as acceleration and braking, as well as mileage and what time of day the car is used. The better the driving young motorists can demonstrate, the greater the chance of premium reductions.

You can see how you are driving by accessing a secure website which will show you should make any changes to your driving technique.

Most of these sites offer advice on how you can improve your driver score and therefore bring down the cost of your insurance.

Another advantage of being ‘watched’ in this way is that your car can be tracked if it is ever stolen, and it may help the insurer work out who is to blame in the event that your car is damaged in an accident.

Black box insurance premiums usually vary month by month or quarter by quarter, depending on how you have driven.

If you are considering this kind of cover, you should always compare quotes from several insurers, as premiums can vary widely depending on their per-mile and peak-time driving charges.

Drawbacks of black box insurance

While black box insurance can result in much lower premiums for safer drivers, if your driving isn’t quite as safe as it could be, your premiums could end up being higher than they might be with a conventional insurance policy.

Other ways to cut insurance costs

If a telematics policy isn’t the right choice for you, there are still plenty of ways that young drivers can bring the cost of car insurance down.

Adding an older, more experienced driver to the policy as a named driver, for example, is a perfectly legitimate way of lowering the cost of cover. However, parents and their children should be warned against ‘fronting’ the policy to lower the cost of car insurance.

This is when someone registers themselves as the main driver on a policy to lower premiums, when in fact their son, daughter or other less-experienced driver is the genuine main driver of the vehicle.

If the insurance company finds out your policy was being fronted while processing your claim, they could reject it because the premium they quoted was not based on correct information.

You can also lower your premiums by increasing your policy excess - the amount you pay towards the cost of any claim you make.

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