If you’re looking for a way to reduce the cost of your car insurance, you might want to consider black box car insurance as an option.
But, a black box policy isn’t necessarily the best solution for everyone.
So, if you’re wondering what it is, how it works, what are the black box car insurance pros and cons, and whether it is the right choice for you, read on.
Telematics car insurance, commonly known as black box insurance, is a relatively new type of insurance where the insurance provider determines your premiums based on your driving performance, in addition to your age, type of car you drive, and other relevant information that insurers take into consideration.
When you take out black box insurance, the insurance company will install a small black box device in your car.
This GPS box monitors the driver’s behaviour and transmits information to the insurer regarding the driver’s performance, including:
Based on these metrics, the insurance company will determine whether you’re a safe driver or not and set lower premiums for those who have a good track record.
For now, drivers who take out black box car insurance make up only a small portion of the total market for car insurance, but this type of insurance is slowly growing in popularity, especially among younger drivers.
But, before you make a final decision, it’s best to consider all the black box insurance pros and cons and figure out if it is the right type of insurance for you.
The cost of the black box insurance depends on the driver’s circumstances. In addition to the metrics the device measures, your insurance company will also consider your claim history, your driving record, your location, and the crime rate in the area.
For those who are considered to be a high risk to insure, like young drivers under the age of 25, black box insurance will always be cheaper than standard car insurance.
Will car insurance go down at 25?
Another thing to keep in mind is that black box policies often come with some extra fees, which may affect the cost of your premium, such as:
If you buy a new car and want to fit your black box into your new vehicle, your insurance provider will ask you to pay for the service.
Your insurer will charge you a fee if you miss the installation date for your vehicle, regardless of the reason
If you don’t want to renew your black box policy, your insurer won’t remove the device– they will disconnect it instead. If you want it removed, you will have to pay for it.
Most black box insurance providers will charge you many of the same fees that come with standard car insurance, such as early cancellation charges, interest (if you pay monthly), and fees for duplicate documents.
Although telematics insurance tends to be most popular among new and young drivers who usually pay the highest insurance rates, it can also be a great option for more experienced drivers who are seen as high risk by insurance companies.
You’re more likely to save on insurance costs with a black box policy if you’re:
Young drivers pay the highest premium because they are inexperienced. If you passed your driving test later in life, you’ll also be more likely to pay high premiums with standard insurance.
If you’re safer than the average driver you can benefit from discounts on your premium and rewards for maintaining a good driving record.
If you set a mileage limit with your insurance company when taking out a policy, the insurer will offer cheaper premiums.
If you rarely drive between 11 pm and 6 am, which is statistically a riskier time to drive, you could save some money by opting for a curfew policy.
If you have a driving conviction on your records, a standard insurance policy will almost certainly cost you more than black box insurance.
A black box insurance policy can save you money on premiums if you’re a safe driver. It’s an excellent choice for drivers that are riskier to insure in the eyes of insurance companies, such as young drivers, inexperienced drivers, and drivers with motoring convictions.
Telematics devices can malfunction and their performance can be sometimes affected by bad weather and poor road conditions. If you believe your black box is not working properly, you should immediately contact your insurer.
The black box device is a small device that is usually placed behind the dashboard or on the battery of the car. There are also self-install black box devices that are attached to the windscreen and plugged into the car.
Your insurance provider will issue a warning if you exceed the speed limit on the road. If you ignore a couple of warnings from your insurer, your premiums will go up.
When your policy ends, the black box device will be deactivated by the insurer. If you want the device removed from your car, it will cost you extra.
Black box insurance can be cheaper than traditional insurance, particularly for new and young drivers, but only if they practice safe driving. It’s best to consider all black box car insurance pros and cons and compare the costs of both standard and telematics insurance before you make a final decision.
My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.