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Are Black Box Insurance Schemes A Good Idea?

By raccars Published

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With younger drivers suffering from increasingly expensive insurance prices, to the point that for many driving at all becomes an unreachable goal, 'black box' telematics insurance schemes sound like a great idea to help reduce costs. However, there are those who criticise the system due to fears of data protection problems, or pointing out that if the box system experiences any kind of failure, it's the driver who is penalised.

These issues have become greater with the news that 'black box' technology could be fitted as standard to all cars from 2025, unless drivers specifically opt out, leading to concerns that drivers can be monitored at all times. Furthermore, there is a possibility that those drivers who do choose not to have telematics in their cars will find themselves penalised by insurers.

Most black box telematics systems work upon the same principles, by measuring the mileage, road conditions, braking behaviour and speed of the driver of the car. Insurance policies become cheaper or more expensive depending upon how good your driving is according to the data gleaned by the box. Some insurers offer rewards, such as cash back in shops, to drivers showing good behaviour behind the wheel.

Those who often drive at night, use poor roads or drive badly are likely to find a behavioural insurance scheme more expensive than a standard policy, while some insurers levy a charge for installation or removal of the box. If your car is used by other drivers, your policy can be affected by the way their driving behaviour is recorded.

Currently in the UK, about 300,000 drivers have opted for telematics monitored insurance policies. Apart from reducing insurance premiums, some motorists have suggested that the black box can make them better drivers, automatically moderating their on road behaviour through the knowledge that they are being monitored. An added advantage is that the black box can perform a similar security function to expensive tracking systems, allowing a car to be located if it is stolen.

Unfortunately, there have also been reports that the monitoring is erratic and that data has been incorrectly recorded. One insurer claims that the system relies on a signal that can easily drop out, at which the system automatically cancels the whole journey, giving an incorrect picture of the driver's behaviour. Other users of the system have complained that while their driving is rated according to the data recorded by the box, they are not given any details about where they might have gone wrong and so are unable to correct poor driving behaviour.

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