Points or convictions? Black box insurance could help

Telematics insurance is one of the most innovative developments to hit the car insurance market. The so-called 'black box insurance' policies monitor customers' driving behaviour and use the information recorded to generate a premium. There are different types of telematics policies. Some are targeted towards young drivers and will bump up premiums if the car is used late at night, while others reward drivers who are genuinely safe and careful on the road. The policies are revolutionary because they allow customers to create an individual premium rather than one generate by your overall risk profile. Usually, insurers price policies partly based on how people in similar circumstances to you have driven in the past. So they’ll look at a number of factors including your age, how long you’ve been driving, the job you do, the type of car you drive and where you live. They’ll match the answers with their database of previous and current customers to see how you fit into the driving ‘population’ for insurance purposes. Of course, your personal driving record is also part of the equation, so if you have had accidents or been convicted of a driving offence in the past, you could find that conventional policies become more expensive. Even if you have learnt your lesson and are a safer driver than you perhaps once were, insurers will penalise you, because statistics show that people who been convicted of driving offences are more likely to make a claim in the future. For just one speeding offence your insurance premium can rise by nearly 10%, while mobile phone offences can have an even greater impact on your annual costs. Drivers who opted for a speed awareness course (in some cases an alternative to a fine and points on your licence), used to be able to guarantee the cost of their insurance cover wouldn’t be affected. But some insurers have now started to increase car insurance premiums of drivers who take a course, alongside those who accept a fine and points. Taking a course is still a good option, though, as drivers are proven to be safer on the roads in the future. However, if you find that car policies have become expensive because of past convictions, a black box telematics policy that rewards safe drivers could be a good way for you to keep costs down. Drivers pay a small initial premium to get the ball rolling, but the cost of the policies then changes (usually on a three-monthly or even monthly basis) based on how, where and when you’ve been driving, as monitored by the black box satellite technology. The policies tend to be better suited to people who drive less, as high mileage can trigger higher premiums. Indeed, most policies have an annual mileage limit of 5,000 or 6,000 miles (although this can be increased as a ‘reward’ for good, safe driving). But if you drive carefully, you can avoid the increase in costs that would usually affect your premium when you have a driving conviction. On the other hand, a driver that is recorded speeding or braking sharply will find their premium will increase, so there is also an incentive to change behaviour if you have perhaps fallen into bad road habits. In fact, there is evidence that people with black box policies have fewer accidents than those on standard car insurance policies. Even better, telematic policies are becoming more common, which means more choice and competition for consumers. You can use MoneySupermarket to compare the different providers and find the best value for your circumstances. Alongside a black box, there are other steps that can be taken to reduce your premium if you have been convicted of a driving offence. Simple measures such as reducing your mileage or parking your car off the road at night will help shave money off your insurance costs. You can also fit an immobiliser or alarm if your car doesn’t already have one. Or if you are thinking of buying a new car make sure you look up which insurance group it belongs to. All cars in the UK are assigned to a group depending on factors including engine size and cost of repairs. Choose a car in a lower group to benefit from cheaper insurance costs.

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