How does black box car insurance work?

Key Takeaways

• Black box car insurance, also known as a telematics policy, involves using a device installed in your car that tracks certain aspects about your driving

• It monitors your speed, braking, acceleration, cornering and mileage, scoring you on each

• It’s a good option for new drivers and those who face high premiums who can benefit from proving their safe driving habits to lower car insurance costs

What is black box and telematics insurance?

Black box or telematics insurance is a type of policy that involves a small GPS tracking device being installed in your car that will monitor your driving and send data to your insurer. It’s designed for young drivers and those who face high premiums, giving them an opportunity to demonstrate good driving habits and earn lower premiums after some time.

What types of black box insurance are there?

Black box car insurance policies generally mean your insurer will use one of the following to monitor your driving:

A black box: Literally a small black box installed in your car for free by an insurer, though sometimes you can do it yourself. It’s the most common type of telematics device used in these policies

Plug-in device: Functioning similarly to a black box but instead using a removable plug-in device that usually plugs into the cigarette lighter of your car. You’ll be able to check if your car is compatible with the device in advanced

Smartphone app: Some insurers offer a smartphone app that will let you track your driving through the GPS signal in your mobile phone

What is pay-as-you-go car insurance?

Pay-as-you-go car insurance involves your provider using a telematics device to monitor your mileage and charge you by the mile for car insurance. Depending on the type of policy you go for, information could be sent to your insurer about how many miles you drive, how you’re driving, or both.

Will I get rewards for driving well?

Some telematics insurance policies reward drivers with things like discounts, money-off vouchers and cashback if you can show you’re consistently driving well.

How does telematics insurance work?

Your insurer will arrange for the installation of your telematics device, and once it’s set up your insurer will be able to monitor your driving habits through the data it sends to them.

How is a black box fitted?

If you’ve chosen a telematics policy which requires a black box to be fitted to your car, your insurer will arrange for this to happen. The small box will need to be fitted by a professional, and it is usually placed in or near the dashboard.

Your insurer will book the fitting, which will usually be at a garage, a few weeks before the policy starts. Your insurer will tell you exactly what is required before the fitting and you may need to show evidence that you are the legal owner of the car, such as your V5C logbook and your driving licence.

You may be sent a plug-in device instead, which you’ll be able to install yourself in the cigarette lighter socket. If your black box is linked to an app, you’ll usually just need to download this to your smartphone for it to start working.

What information will my car insurance provider collect about me?

You will be told in advance exactly what kind of information your insurer will record when you have a telematics policy. Most insurers will monitor the following driving habits:

• When you drive: you’re statistically more likely to be involved in an accident if you’re driving at night or in rush hour

• Where you drive: there’s more risk of an accident on busy roads and motorways compared to quiet country lanes.

• How fast you drive: what your average speed is, and if you ever go over the speed limit.

• How many miles you drive: the more you drive, the higher your chance of an accident

• How you drive: this includes, how you steer, brake, and take corners

How do black box insurers reward good driving

Your black box or telematics device will track your driving and give you a score based on the factors we outlined above. Keeping a consistently high score can lead to lower insurance premiums once you renew your policy, and may also offer rewards like cashback or vouchers.

However, if the insurer gives you a low score this could result in your premiums increasing - so be sure to drive carefully.

How much does telematics car insurance cost?

The price of your telematics car insurance policy will depend on a range of factors, including your age, job, location, car and the way you use it. Black box policies are designed primarily to help young drivers bring down their relatively high insurance premiums, but they can benefit all drivers no matter the age or level of experience.

How can telematics benefit young drivers?

Young drivers are statistically more likely to be involved in car accidents and therefore insurers charge them the most on average for car insurance. Therefore, any way they can lower these costs will be a benefit.

If a telematics car insurance will cut their premiums, then it can be a good option. But it’s worth remembering that if an insurer records your driving and doesn’t think you are driving well, your premiums could go up as a result.

Things to be aware of with black box insurance

Here are a few things you should be aware of before you take out black box insurance:

• No tampering: If you damage your telematics device you may have to pay to replace it, while tampering can also mean your insurers void your policy or increase your premiums

• Be careful about mileage: Black box policies might not suit high mileage drivers, especially if you go over your expected number of miles

• Not ideal for nighttime drivers: If you work night shifts or regularly drive at night, this can negatively affect your premiums

• Careful who you let drive your car: Don’t let bad drivers or those without insurance drive your car as it will affect your driving data and likely void your insurance

• Stick to the rules of the road: Following basic laws like speed limits is common sense, but it’s extra important if you have a black box as it will affect the cost of cover in the future

How else can young drivers reduce car insurance premiums?

While installing a black box can be a good way to bring insurance costs down, especially for young drivers, there are other things you can do to try and reduce your premiums:

• Pay annually: If you can pay up front for your car insurance policy it will generally cost less than spreading it over 12 monthly payments

• Take out comprehensive cover: Fully comprehensive cover not only offers the best protection, but is also generally the cheapest level of cover available

• Add a named driver: Adding an experienced named driver to your policy can help bring costs down as it means you’re sharing responsibility and risk with another driver

• Reduce your mileage: The fewer miles you drive the lower your risk of being in an accident - and a black box will be able to show this, especially on pay-as-you-go policies

• Build up your no-claims discount: If you can go for a year without making a claim on your car insurance policy you’ll earn a discount on your car insurance - and it’ll grow with each year you go without claiming

Compare car insurance quotes

Comparing black box car insurance policies with MoneySuperMarket is a quick and easy way to find affordable cover, especially for young drivers. Just tell us about yourself, your car and your driving habits and history and we’ll find a list of quotes that match your needs.