Black box technology is supposed to help drivers reduce their premiums but break the rules and a fine could be on its way through the post from your insurer
Black box technology – also known as telematics – was designed to help motorists, specifically young drivers lower their premiums by agreeing to have a black box fitted to their vehicle to monitor the policy holders driving.
Currently there are around a dozen companies providing black box insurance which is getting more popular year on year. For example between 2010 and 2014, the number of policies increased from 12,000 to 290,000. With premiums for young drivers being astronomical because they are most likely to have an accident it is no wonder the number of people choosing black box technology is on the increase.
Another reason for the big increase in policies being taken out could be down to the fact that insurers are no longer allowed by law to discriminate between genders. In general before the EU directive females benefited from lower premiums compared to a male counterpart.
The fact these policies are sold on the pretext that if policy holders can prove they are safe drivers the insurer will reduce the cost of your premiums. Research does suggests that policy holders who have a black box fitted, and record safe driving habits through the technology could have £212 knocked off their insurance, but premiums do start at around £1,300 a year.
According to the Association of British Insurers, 18-year-old drivers are three times more likely to be involved in an accident than a 48-year-old
But like anything nowadays the devil is always in the small print. Mike Powell, insurance analyst at research company Defaqto, says: ‘Black box insurance carries so many fees and charges, they need to be made much, much clearer.
‘It’s very easy for drivers to be taken in by the technology, along with the promised drop in premiums, but they can end up paying out a lot more than they thought.’
Why is this? A recent Daily Mail investigation discovered that drivers who purchase black box policies could be fined for speeding, selling their car, switching insurance policy or breaching the policies small print.
They newspaper found that £100 penalties are issued in the most extreme cases. Insurers like iKube, for example, fine motorists £100 per night for driving during the policy’s 11pm to 5am curfew, and these penalties (fines) can be added from day one.
Some of the reason exposed for insurers fining policy holders included: £100 for missing an appointment to get the device fitted, not having documents like a driving licence, MOT certificate and proof of ownership during installation can result in fines between £30 and £45. You’ll also have to pay to reinstall the black box if you buy a new vehicle or a fee if you cancel your policy
How black box cover premiums compare
|Without black box||With black box|
|17-year-old student (third party fire and theft)||£1,875.14 (Bell)||£2,109.29 (Drive Smart)|
|17-year-old student (fully comp)||£1,633.03 (Endsleigh)||£1,254.51 (Drive Like a Girl)|
|19-year-old student (third party fire and theft)||£750.48 (Bell)||£1,346.25 (Drive Smart)|
|19-year-old student (fully comp)||£837.40 (Bell)||£821.95 (Hastings Direct)|
|21-year-old office admin (fully comp)||£647.66 (Bell)||£564.80 (Drive Like a Girl)|
|25-year-old teacher (fully comp)||£513.77 (Endsleigh)||£522.58 (Tesco)|
I can understand why drivers are attracted to these type of policies. This investigation shows before signing up always do your homework and compare fees and fines between the dozen or so insurers offering this type of cover.