Black box insurance explained

How does telematics insurance work and why should you get it?

This article will explain how a telematics device, also known as a black box or Smartbox, records data on your driving habits and how your insurance policy provider uses this information to save you money.

What is telematics insurance?

Telematics insurance is a type of policy offered to young or new drivers to help them reduce the cost of their insurance premium. A device – quite literally a black box – is installed in your car and records telematics data about the miles you have covered and your driving style. The idea is that you are rewarded for driving well with lower premiums.

How does the telematics device work?

Telematics devices are fully autonomous. When the engine starts, the box ‘wakes up’ and starts searching for GPS satellites, much in the way a satnav does. As the signals can be weak, telematics devices use multiple (ideally 10 to 12) satellites to find exactly where your vehicle is.

Your black box will record data throughout your journey. When the engine is turned off, the device detects that the journey is over and returns to sleep mode.

What data does a telematics device record?

The exact data a black box records will differ between policy providers, but may include:

  • Distance – how many miles have you covered?
  • Speed – how fast are you driving?
  • Acceleration – are you changing up through gears smoothly or accelerating quickly?
  • Braking – are you carefully slowing to a stop or slamming on your brakes?
  • Cornering – are you taking corners too fast?
  • Time of day – are you driving late at night or perhaps when the sun is low in the sky?

How do telematics insurance providers reward good driving?

Different insurers will look at different aspects of driving to judge whether you’re a good driver. They may check the information collected against other data such as weather (were you driving in dangerous conditions e.g. in snow or ice?), road type/condition (were you driving on bumpy country lanes with blind corners or on wide, straight stretches?) and speed limits.

Each policy provider has its own calculations to assess your driving. Keeping these calculations to themselves encourages overall safe practice, rather than drivers trying to ‘game the system’.

I had a bad day of driving – will I still be penalised?

A one-off bad day of driving is less likely to be penalised than constant poor driving over days, weeks or months. So it may be possible to recover from the odd bad day by returning to really good driving habits. Your policy provider is more concerned about consistent poor driving as it can signal that you’re at higher risk for accidents, but you should always check the details of the policy you’re planning to buy before committing to a purchase.

It’s worth bearing in mind that the black box reflects how the car is driven and does not differentiate between drivers. This means that if you share your car with siblings, parents or someone else, everyone’s driving will be taken into account, not just yours.

What happens if I drive badly all the time?

If your data shows that your driving is continually poor or dangerous, your policy provider may give you a caution. If you don’t show any improvement, you will likely only be given a few more chances to prove yourself before your policy is terminated.

The reason that bad drivers have their policies cancelled is because premiums are calculated by average risk across age groups and policy types (among other things). As such, a few bad drivers will increase the average cost of insurance for everyone, making it unfair on those who drive safely.

What are common telematics insurance rules?

Most standard telematics policies will have rules in place which you’ll need to follow. This includes:

  • Limited mileage: some policies are limited to a certain number of miles each year.
  • Curfews: the majority of accidents happen overnight, so many telematics policies will impose a curfew.

Why is Adrian Flux’s black box policy different?

Although we’ll still ask you how many miles you’re likely to drive, this is a common question asked of all policyholders – whether they’re taking out black box insurance or not. You should try to be accurate with your estimate, but if you find that you underestimate your mileage, you can always top up your policy with additional miles.

We also don’t believe in curfews for young drivers. We know there are many reasons you might choose to drive at night, so we won’t penalise you for it.

How do I install a telematics device?

For you to benefit from telematics insurance your policy provider will require the device to be installed in your car. In some cases, they will arrange for an engineer to install your black box and you will probably need to pay a fee for the installation, which could cost between £100 and £180. You’ll likely need to go through a similar procedure again and pay to have it removed from a car you no longer own or swapped to a new car.

To make life easier, more convenient and typically cheaper, Adrian Flux black boxes can be installed yourself. Here’s how to install a telematics device. After arranging a policy or changing to a new car, the device is simply stuck to the front window, as you can see here:

How much money can I save with a telematics policy?

The amount you’ll save on your renewal depends on your provider and your driving. Young people can see a reduction of about 10% to 20%, but some may achieve a much bigger discount. Most policy providers will advise you of the exact cost of your renewal at the end of your insurance year.

Unlike other providers, Adrian Flux offers a telematics policy with an app that shows a predicted renewal premium every day. This means you have more visibility over how your driving style affects your renewal cost. As such our policyholders see reductions of up to 60%.

Black box insurance: pros, cons, and how much you could save

Are there any other benefits to having a telematics device in my car?

Some black boxes come with features that you’d expect to see on new or high-value cars. For example, our black boxes can detect an impact and alert the authorities for you in case you are incapacitated.

Black boxes may also come in handy if you need to claim. The data recorded can be used to back up your account of what happened in cases of dispute. One of our own policyholders was in an accident where the vehicle in front reversed into them at a T-junction. The third party claimed that the policyholder was at fault and had driven into the back of his car. The data backed up our customer’s version of events as it showed he was stationary at the time of the incident, saving him a costly at-fault claim.

If you’re a parent interested in buying insurance for your child, then you’ll be pleased to hear that telematics policies can offer great peace of mind. Being confident that your son or daughter is driving well, you’ll be able to trust them to drive sensibly once the black box is removed or disconnected (once they move to a different policy). Our FluxScore black box insurance policy allows a parent to access the app and view past journeys in more details. So you can be absolutely certain that they are driving safely.

Another feature that is offered by FluxScore is a text messaging service that sends warnings about driving conditions within a three-mile grid around your car. If the weather is below freezing, for example, you’ll get a text reminding you to watch out for black ice.

Interested in getting black box insurance? Learn more about our own FluxScore black box insurance by seeing our bespoke smartphone app in action.