‘Black box’ insurance, also known as telematics and ‘pay-per-mile’ cover, allows insurers to electronically monitor a car owner’s driving in exchange for lower premium payments than the policy holder might otherwise pay.
Typically, a policy stipulates how many miles can be driven each year or month and at what times of the day, which are often outside rush-hour periods and the night time.
The ‘black box’ itself tells insurers where and how well you drive, how many miles are covered, and when you’re behind the wheel.
What are the pros and cons?
Students and younger drivers – Students and young drivers are quite often inexperienced and, as a result, are hit with higher premiums (‘young and inexperienced’ statistically means more accidents). Black box cover might appeal to them as they often keep hours outside the usual 9-to-5 and may have no great need to drive at night.
The elderly – Others who might benefit include the elderly, who also may not need to drive during rush hour conditions, or at night, and ordinarily have to pay higher premiums due to age.
Homeworkers – Those who work from home and are young drivers, or perhaps are older but still inexperienced, might also benefit for the same reasons as for students and the elderly.
Encouragement to drive less – Black box cover might also encourage less driving and therefore help lower petrol and associated usage costs, such as garage bills. This also has the side-effect of making it less likely you’ll be involved in an accident.
Pinpoint stolen vehicles – The black box technology means that if your car is stolen, it’s easier to track as it includes GPS systems.
Temptation to rush – You might be tempted to drive in a rush if a ‘curfew’ hour, the time during which it’s been agreed you won’t drive, is about the be breached.
Fines – Many black box policies hit you with fines which are added to your premiums if you exceed the policy terms, such as by driving more miles in a given month than agreed.
Personal circumstances – If your circumstances change, such as starting a new job which requires a commute, you may have to change your cover, for which there may be a charge.
Urgent situations – Situations could arise which mean you feel compelled to drive at a time of day, or for a distance, that is outside of the terms of your black box cover; if a family member becomes ill and needs your help, for example.
Additional charges – Changing vehicles and/or having the black box system removed can incur additional charges.
The customer service team at Policy Expert is always on hand to help – either online or over the phone. Whether you want assistance in finding the right policy or even handling a claim, we make sure it’s all handled by experts. For more information, you can call our experts on 0330 0600 600 or visit www.policyexpert.co.uk/contact for more ways to reach us.
Published 16 August 2017