Today in the UK, there is over half-a-million motorists that have a telematics box installed in their vehicle, of which is part of a telematics insurance policy. A relatively new and very popular type of insurance that is changing the way consumers think about insuring their vehicle.
According to The British Insurance Broker’s Association (BIBA), they have seen a rise in this type of policy over the last few years by a whopping 40%.
But, what is telematics insurance, and what are the advantages?
Well, telematics insurance, black-box insurance or even pay-as-you-drive insurance is a way for insurers to analyse the way you drive. When fitted in your vehicle, the telematics box will record things like speed, braking patterns and distance travelled, all with the aim to calculate how safe you’re driving.
This type of policy allows insurers to calculate risk on the kind of driver you are and adjust the price of your policy accordingly. This different compared to a stand-alone insurance policy, as the price you pay is based on assumptions and industry trends. Some telematics insurance companies even reward safe drivers instantly, meaning no claims discounts will be applied within a couple of months.
So, what’s the advantages?
If you drive safe, you get rewarded
As we mentioned above, a telematics box can measure different areas of your driving. If you keep to the speed limit, you aren’t too heavy on the brakes and travel at quieter times of the day, be prepared to see a reduced premium.
Black-box insurance is better for society
With around five deaths on average a day on the roads in the UK, promoting safe driving through black-box insurance with help decrease traffic accidents.
Ward off thieves
Telematics boxes are GPS enabled, meaning your vehicle can be tracked if reported stolen. Some telematics boxes have the capability to disengage the ignition.
Helps with claims management
With a vast amount of information available from a telematics box, this will speed up a claims process by providing insurers with detailed analysis.
Telematics insurance is an excellent option for young and new drivers, but it designed to reward the good drivers. However, this type of policy does come with some disadvantages…
Telematics box cannot tell who is driving
Even if you are the safest driver in the world, a telematics box cannot detect if somebody else is driving the car. So, if you have a secondary driver on your policy who has a few bad habits, this will affect your black-box data.
The black-box is not free
The devices installed kind be pretty costly, even if your insurer fits the black-box for free, you will more than likely be charged in a different way, whether an add-on or via the premium you pay.
We hope this article proves to be useful when selecting your next insurance policy.
United Legal Assistance are market leaders in Claims Management and Legal Expense insurance, we would be more than happy to answer any questions you have about Black-Box insurance!