Black Box Telematics Car Insurance
Young and other supposed "high risk" drivers are increasingly finding car insurance prohibitively expensive. The irony is that the only way to reduce your car insurance premium is to be experienced, but you can't gain experience without insurance.
One attempt to solve this problem is the increasingly popular black box (telematic) policy. People are rightly nervous about handing over GPS data to a firm in the evil insurance industry, especially when driving is one of the sections of life where the majority of us break the laws frequently (there's room for a debate on that another day, but it's true).
I used a telematic insurance company for one year in 2012, and I only joined them because they offered me a £1,000 annual saving. I didn't want to do it. After a year, I only left them because a company without a black box offered me a quote for only £100 more.
I decided £100 a year more was worth paying to go without any black box tracking. However, a few years later, I learned a little more about it, and would happily join again in a heartbeat.
My review of my experience is based on my insurance policy during 2012. I can't promise some company's procedures won't have changed since then, but I doubt the customer experience will have changed significantly.
What happens if you're a bad driver?
Perhaps this is a silly question to pose because nobody calls themselves a bad driver. That's one of the reasons why the roads are so dangerous, and why policies like these are required.
The laws regarding insurance companies are complicated, but basically if you have agreed to a policy they can't start taking parts of that policy away from you just because you drive at night or once did 75mph on the M1.
Instead, what these companies do is use the data they have to offer you rewards if you avoid taking risks. Avoiding risks means not just not speeding, but not driving in the dark when more young people are involved in accidents. So you can still drive at night, you'll just miss out on a prize. You're still getting the policy you paid for.
Where caution is required is when you break the conditions of your policy, such as the mileage you agreed not to exceed, or the limit on how long you can drive abroad for. Whereas without a black box most people just hope the insurance company won't notice, with telematics they will notice straight away, and you'll be in complicated legal land. This is a common problem and a telematic insurance company will offer a solution for you, but it'll cost.
Do you notice the box?
No, not unless you habitually take apart parts of your dashboard. It's discreet and silent.
What are the benefits?
The obvious answer is the cheaper price. This works on fear better than anything else: your clichéd young driver who does handbrake turns in Tesco car park is never going to agree to a black box, and with him out of the picture, your quote comes down.
The data which the insurer collects is used to provide you with statistics and feedback on your driving. Unless like me you get strangely excited about statistics, I wouldn't worry too much about this, as it's usually pretty inaccurate.
Having an active tracker is a clear benefit if your car was ever stolen. The device is also good at detecting if you're involved in an accident, and many will alert the police.
Finally, the whole idea of telematics is that if you have nothing to fear, it will vindicate you. Unfortunately, many people genuinely believe their driving is perfect, even when it blatantly isn't. Should you ever be involved in an accident, and you were driving carefully and/or in the right, your insurance company should have all they need to prove you weren't to blame.
What information does it hold on you?
I don't work for any insurance company so can't speak for their data protection policies, but it's worth remembering that your phone will hold just as much information on you.
However I have been involved in the development of one major make of black box and was shocked at how little information it collects. It will only check your speed about every 30 seconds, and often loses its connection. If you're slowing down for bends and junctions, the odds of it catching you speeding are much lower than you'd think.
When I had a black box, I would panic every time I went in to a corner too hard, thinking that will be recorded and used against me. It never was. The system knows we all have to brake hard every now and again. If it's a genuine mistake, you really don't need to worry. Only if you can't get to the end of the street without attempting a handbrake turn are you are the type of person it's looking out for.
Why is tracking cheaper?
For the evil insurance companies, black boxes have two benefits.
The cost of your insurance premium is basically that company's guess of how likely you are to be involved in an incident. If you have nothing to prove you're a sensible person, they have to assume you're not sensible. A typical 'boy racer' would never agree to getting a black box, so the fact you're considering a black box rules out you being a 'boy racer', and is therefore some evidence that you're a sensible driver.
Secondly, when there's an accident, establishing who caused it (and who's insurance needs to pay) is often a long process. The information on the black box may answer many of the questions, making investigations much easier.
Isn't a dashcam better?
Dashcams collect a lot of evidence. For most drivers, the majority of that evidence incriminates them (think about how many people drift across lanes or go through red lights without even noticing, or even provoke a reaction to make a good YouTube video). But people like having dashcams.
For the insurance company, a powerful dashcam that can remember poor driving is much better than a standard black box. The problems are that an insurance company-supplied dashcam would be much easier to 'jailbreak' than a hidden black box, and there's a debate about how the footage should be stored.
I suspect that in the future dashcams will replace black boxes.
Aviva Drive is very similar to a black box, except it's installed on your own phone and, by admission, it uses a lot of battery power. It therefore appears to have all the weaknesses of a black box, except the additional fact that it only records data when you tell it to, and you might be a passenger or even on the bus! I therefore have to assume that they know their data isn't reliable - but I'd be interested to hear what Aviva Drive users have found.
The other problem with Aviva Drive is that it calculates your discount based on your first 200 miles only, so all you need to do is make sure the first 200 miles you record are a smooth, long cruise.
Aviva Drive seems to be self-selecting in that the only people who will be interested in an app which gives feedback on their driving are people who are generally safer drivers (because they listen to feedback). That'll be why the adverts are so smug - which is what puts me off it.
The whole purpose of Aviva Drive is supposedly that a good score will reduce your next premium. Unfortunately - despite me having a perfect score - the good driver discount was outnumbered by the ridiculous renewal premium. I came back as a new customer, and despite having no renewal premium, it still worked out cheaper.