Black box car insurance is relatively new kind of car insurance. It’s a growing market and is mostly dominated by young drivers. This is because telematics was created to make insurance more affordable for young drivers and to be used positively, to encourage safer driving behaviour.
Does it work?
There’s various evidence that suggests that telematics does work. For example, young drivers who are insured with insurethebox are 75% less likely to cause an accident after 12 months of insurance - around half this improvement would happen as they gain experience anyway.
Young drivers with a telematics box policy can also expect to be involved in 700 fewer accidents as a result of having its telematics box. Telematics users also have the benefit of Accident Alert, this means that if the black box senses a strong impact on the car an alarm goes off in the Service Centre and, if the car is stationary, the telematics company will try to contact the customer on their phone to check if they are okay.
Why does telematics work?
There are various reasons why telematics works:
Customer feedback and interaction
Telematics also works because most telematics products are designed so that insurers can give feedback to their customers, letting them know how they’ve been driving and what they need to do to keep getting better.
Most telematics insurers gain access to a personalised feedback system such as an online portal where they can review their driving history. Different insurers give different feedback, but typically speaking drivers can find out about their speed, the time of day they’ve driven, motorway driving and the periods they have driven without taking a break. This communication between insurer and customer is important to help customers become safer drivers.
One of the main reasons that telematics works is that drivers know that if they drive safely they get rewarded for it. Some examples include better premiums at renewal or more additional miles (most policies come with 6,000, 8,000 or 10,000 miles of cover if customers prove safe driving. This nurtures positive long-term driving habits.
Telematics insurance providers also give customers custom renewal rates based on their actual driving behaviour. Insurethebox say that over 84% of young drivers (17-25 years old) save more than £200 at renewal.
Other notable Insurethebox statistics include: