Pros and cons of black box insurance

If you’re a new driver, aged 25 or under, you could save money by opting for a telematics or black box insurance policy. This can involve having an electronic device tted to your car that monitors your driving or in some cases uses a smartphone app to feed information back to your insurer.

Black box policies use GPS positioning and a motion sensor to determine if the car is being driven responsibly. Obeying speed limits, steady acceleration, smooth and progressive braking and gentle cornering are rated as good driving traits, while stamping on the accelerator or brake pedal and hurtling round corners like a wannabe racing driver are bad.

Other factors the insurer may monitor include the number of miles driven, the type of roads driven on and the time of day the car is used.

This enables the insurer to build up a bespoke risk pro le that should be much more accurate than relying on the usual general measures, such as age, postcode and driving experience.

Typically, the insurer doesn’t keep this information to itself. Regular feedback is available through an app or via web portal, which drivers can use to check how well they are driving and make changes to keep the black box happy.

For new, young drivers living in high risk areas, telematics cover may be the only option for the rst year. Bene ts include a discount on cover for the second year, and additional monthly rewards such as discount vouchers or an additional mileage allowance for every month of good driving. Insurers say it can be up to 39% cheaper than standard cover, but we recommend that slightly older, more experienced drivers compare the costs of both. It’s worth noting that some telematic policies will deduct driving points or even impose a ban on those who drive between midnight and 5am, because the likelihood of crashing signi cantly increases in the middle of the night. This means such a policy won’t suit those who rely on their car to travel to or from work during those hours. Also, if drivers consistently gain a low driving score, some policies will levy an extra fee of up to £250 on top of the premium; if this isn’t paid the policy could be cancelled altogether. And, if you change your car mid-term, some insurers will charge up to £150 to swap the box to your new vehicle.