Black Box Insurance
What Is Black Box Insurance?
Telematics technology has taken the car insurance industry by storm and this is just the beginning. In just a few years, the bridging of telecommunications and data collection has brought about a product that is growing in popularity with drivers of all ages. That product is telematics based car insurance, which is also known as Black Box Insurance, Usage Based Insurance, Pay as You Drive and GPS Car Insurance.
It is the first car insurance of its kind and is a completely unique product within an industry which has only known traditional car insurance for decades. Those drivers in search of a performance-based car cover are finding the perfect match in Black Box car insurance, regardless of age or experience level.
Black Box car insurance is breaking new ground as the first car insurance which is completely focused on improving the safety of UK roads and helping drivers save money. There is one way to save money with Black Box and that is to drive safely. Historical statistical data is not used in formulating cost, which is also a first within the industry. Black Box car insurance involves the installation of telematics technology based equipment which is placed in the insured car by the insurer. It does not affect the warranty on the car in any way. The device is GPS based and makes it possible for the insurer to monitor driver habits such as speed of the car, braking and cornering, as well as other data related to driving. The data is accessible by the driver, who can then review it for areas which might need improving.
Driving-Related Data which is Collected Includes:
- Time of day the car is taken on a journey
- Distance of the journey
- Speed of the car at all times
- Which roads and types of roads the car travels upon
- Braking style of the driver
- All relative data connected with a car crash
Different Schemes for Different Drivers
Every driver is different and has unique driving requirements each week. Drivers are typically taking journeys to and from university or a place of business during the week. On weekends it varies. Most are driving at night for social events or to eat out. For every driver there is a unique scheme that matches their particular schedule.
Black Box insurance provides a unique scheme for every driver. Pricing of the insurance policy carries with it conditions in line with how risky the driving will be. That is, what the chances for a car crash are during those times during the day. Rush hour is an example of a driving period which is considered riskier to drive in according to insurers.
There are specific times which costs for cover will vary. They are:
- Young drivers will pay more for miles driven between the hours of 11pm and 6am, especially on the weekends
- Miles driven during rush hour will be more costly
- Miles driven on routes considered more dangerous or hazardous will carry extra cost
- Drivers will pay less for miles driven whilst braking safely and within speed limits
Advantages of Black Box Insurance
Young drivers and their parents are especially drawn to Black Box car insurance. Safety is appealing to parents, whilst saving money is attractive to both the parents and young drivers.
For the first time, young drivers have an opportunity to cut the cost of their car insurance and make a difference in the reputation of the group as a whole. Young drivers are statistically the most dangerous group of drivers on the road and Black Box insurance directly addresses the issue.
Drivers are monitored at all times from the moment they sit behind the wheel. Young drivers are routinely distracted by everything from the mobile phone to the passengers within the car. Black Box provides the incentive young drivers desperately need to spend more time focusing on the road ahead. The rewarding part is how young drivers can save money simply by driving with safety.
Those individuals who drive a light schedule during the week will see the benefit of lower premium costs by not having to purchase many miles to maintain cover. The miles can then be topped up at any time the miles start running low. Drivers finding themselves in the unfortunate circumstance of a car crash will have full knowledge of liability for the crash due to the GPS technology which is on-board all insured cars. This will also benefit the driver in the area of claims recovery from a third party.
The GPS technology does not only assist in the event of a car crash. It makes it possible for the authorities to begin recovery of that car straight away.
Other Advantages of Black Box Insurance
- The possibility of having access to an online dashboard which gives a driver full data reports of their performance whilst behind the wheel.
- Not only is it possible to store all documents online, but also track miles used.
- Notifications can be sent for all important tax and insurance due dates.
- Review of all driving is possible, enabling constant optimum petrol efficiency.
There are possible disadvantages of Black Box Insurance. Drivers choosing to disregard safety will not see advantages related to Black Box. Also, drivers who have no other choice but drive during rush hour will most likely not see an advantage to Black Box.
Many drivers have taken a position of assuming there will be no advantage to obtaining Black Box Insurance to later find out they were wrong. Every driver is different and every driver requires their own special type of car insurance policy.
Pricing is Basic and Easy to Understand
- Most insurers require an initial premium payment
- Firms vary in cost for installation of telematics based equipment
- Upon the sale of a car, equipment may be left in to allow the new car owner to benefit from it
- Cost of miles varies depending on the time and route of journeys taken
- Young drivers could see variations in pricing based on allowances for nighttime driving
- Renewal cost will be based on the driver’s performance throughout the year and the safe driving practices they demonstrated