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Black box car insurance – also known as telematics insurance – is a type of policy that monitors driving behaviour using a digital device fitted to the vehicle’s dashboard console.

What is a telematics device?

The so-called “black box” is a small electronic device that relays information and statistics based on the driver’s ability and behaviour back to the car insurer by satellite. 

Premiums are then calculated based on how you drive. Premiums may be significantly reduced at renewal if the device records safe driving behaviour. Many telematics car insurers award a score based on the data they receive back from the device, and this will determine how much you pay at renewal.

Pros and cons of black box car insurance

Pros:

• Lower premiums for good driving

• Encourages safe driving

• Can help locate your car if stolen

• Can alert authorities if you crash

Cons:

• Higher premiums for bad driving

• Some providers charge for installation

• May not suit high mileage drivers

• May restrict your driving

How is the black box fitted?

The fitting of the device is now a simple task that can be carried out by the owners of most newer models of car by plugging it into the 12V outlet. Some, however, may need to be fitted by an agent of the insurer in older models.

Most insurers will arrange a convenient time for an installer to visit you at your home or place of work and install the box. You will usually have 14 days to have the box installed, after which the insurer may cancel your policy.

How does it track driving behaviour?

The black box monitors and records your driving behaviour, and sends the data back to the insurer. The following metrics will be taken into consideration:

• Speed – the device will record whether you are breaking local or national speed limits

• Acceleration – recording whether you are gathering speed in a measured way

• Braking – the device can measure how harshly or smoothly you slow down

• Cornering – are you cornering too fast? 

The telematics device also sends the insurer data on the time of day you drive and the number of miles covered, as well as the type of roads driven on.

Most policies constantly monitor the driver’s behaviour, sending data after every day or journey. Some insurers, however, only require the device to be used for a short period, for example three months, after which it is returned and the driver’s premium may be adjusted based on the data collected.

Driving restrictions and curfews

Some policies set a curfew after which you are not allowed to drive, usually during the night. Driving at night is statistically when you are most likely to have an accident, so your insurer may place a curfew on driving between 11pm and 5am to reduce the risk.

If you know you will need to drive at night, for work for example, find out how much this could affect the cost of your cover. Most insurers will review any breach of curfew on a case by case basis, so if you had to drive at night due to an emergency you may not be penalised.

If you break your curfew your premiums could increase, or you could be charged a penalty of up to £100. If you repeatedly break curfews without notifying your insurer, your policy may be cancelled.

Who is black box car insurance for?

Telematics car insurance can reduce premiums for different types of driver, including the following:

• Young and new drivers: 17-24 year olds are statistically the most likely to make a claim, and therefore the most expensive to insure. Black box car insurance means cover can be tailored to your driving habits, not those of everyone in your age range.

• Careful drivers: If you are a more sensible driver than most, a black box policy could prove this to your insurer and earn you a discount at renewal

• Low mileage drivers: Black box policies look closely at how often and how far you drive. Higher mileage drivers are considered higher risk by car insurance companies, so the fewer miles you cover, the less you will usually pay

• Daytime drivers: When calculating your premium, many providers look at when you drive. Night-time motoring is riskier than during the day, so if you rarely drive after dark you could save money

Not only can a black box mean cheaper insurance, but it can also make you a safer driver by encouraging and rewarding sensible motoring behaviour.

Who is black box car insurance not suitable for?

It’s unlikely that a black box policy will be of any benefit to experienced drivers who can demonstrate several years of safe motoring without making an insurance claim. Indeed, your no claims discount data will already show car insurance companies that you are a safe driver and they will offer better discounts (up to 75%) than a black box policy.

Simple ways to save with a black box

The best way to save is to drive sensibly and within the rules of the black box policy.

Each insurer will use the data they collect differently, so look carefully at how your premium and driver scores are calculated to make sure you are doing everything you can to get the best rating. 

Try to plan your journeys to avoid peak driving times and curfews. If you drive at rush hour every day this could increase your premium, even if you drive safely.

Most insurers will provide regular feedback on your driving by email or app, so if there is something specific that is increasing your score you can take steps to correct it.

For more tips on keeping your premiums down, try these 10 easy ways to cut your car insurance costs.

Is black box car insurance always cheaper?

No. Shop around to get as many quotes as you can before you choose a telematics based policy and look out for any additional fees specific to black box cover that could increase your costs. These may include the following:

• Black box installation fee (up to £50)

• Fine for missing installation appointment (up to £100)

• Changing car (up to £100)

• Damage to the box (up to £150 if deliberate and your policy could be cancelled)

• Black box removal (up to £80)

• Penalties for breaking curfew (up to £100)

Make sure you factor these costs in when you are comparing policies.

Where can you find black box car insurance?

There are many specialist providers that offer black box car insurance.

If you already have a policy, ask your insurer if you can transfer to black box cover. If they do not offer it, work out if it is worth cancelling your policy and paying a cancellation fee (of up to £75) and taking out a telematics policy elsewhere.