The term black box often brings up images of the black box on an airplane. What is a black box for a car? While the image itself is a little different, the function they serve is actually quite similar. Telematics, or “black boxes,” are used by insurance companies to provide an affordable insurance option based off your driving practices.
How Do Black Box Devices Work?
A telematics device records information regarding driving habits that is then transmitted to an insurance company. These devices are often small, easily installed devices that attach directly to your car. While different insurers look at different aspects of your driving to determine your rate, information that is gathered can include: speed, frequency of travel, distances traveled, sudden braking or acceleration, as well as any accidents. These devices then transmit the gathered data directly to an insurer who then assesses the information.
Once the information is transmitted, different insurers will look at different aspects of your driving. It is important to speak with an insurer prior to signing up for black box insurance to ensure your driving will qualify you for a discount. They will be able to tell you what factors they look at in determining a premium for you and your automobile.
What Impact Can They Have?
Black box insurance is a great way for young drivers and drivers who don’t drive often to save money. Insurance companies calculate a rate based off the actual usage of the vehicle along with other predetermined factors that are gathered from the device. If a driver displays safe driving characteristics, along with minimal mileage driven, they can often see their premiums fall to new lows. As a result, drivers are encouraged to drive safer and smarter by minimizing the distances they travel and at what speeds. Black box insurance rules are set out by each of the black box insurance companies.
Types of Black Box Insurance
Black box insurance can come in many different types, depending on the insurer. For many young drivers or high risk drivers, special policies to encourage minimal driving and safe driving exist to save them money. They provide a lower premium alternative to often pricey options offered by other insurers. Other options include “Pay As You Drive” or “Pay How You Drive.” These two types of insurance only deal with how and how often you drive your automobile. These are a great option for both those who don’t drive very often, or those looking to reduce their driving. They make drivers more cognizant of their driving habits and help save money on premiums as well as at the gas pump.
As always, before signing up for any new insurance policy, shop around to find the most competitive rates in your area. Looking at different options is a great way to ensure that you are getting the best deal and the best coverage that you require to keep you and your automobile safe on the road. Black box insurance is simply another offering in the wide array of coverage options available in today’s insurance marketplace. With a firm understanding of how black box insurance works, you will be able to better determine if it is a good fit for you. Have a look at some black box insurance reviews to work out specifics of ones available.