Telematics Car Insurance (Black Box Insurance) Guide
In this guide you will discover everything you need to know about telematics car insurance. Telematics car insurance is also known as black box insurance, or “pay how you drive” insurance. If you are a good and responsible driver, telematics could help lower your insurance premium for good behaviour. Telematics has been used in fleets for some time but is now set to be the standard in car insurance. There’s lots to consider so be sure to read telematics car insurance reviews and get up to speed on telematics technology and telematics comparison.
Estimates show that up to 20% of young drivers could be using black box car insurance by 2020. Studies have shown that up to 57% of all drivers in the UK intend to switch to telematics insurance by 2017. The scheme works by having a device on your car send data to your insurer about your driving behavior. The economist reports that current methods of underwriting are cruel compared to what telematics can offer http://www.economist.com/news/finance-and-economics/21572237-gizmos-track-driving-habits-are-changing-face-car-insurance-hows-my
Virtually every leading insurer in the UK and America is implementing a telematics scheme. Fortunately many insurers are offering substantial discounts for those who sign up for a trial of their new program. Blackboxinsurance.com is a new comparison site that helps you compare telematics insurance and there are many others like this cropping up now. One market leader recently signed up its first million customers and acquired over 5 billion miles worth of data. The insurance telematics conference should lead to new innovations in insurance policy http://www.telematicsupdate.com/insurance-telematics-eu/
The telematics schemes coming out are built on three fields :
Americans are focusing on how long you drive your car for per year, where as Brits are focusing on how well you drive. We are taking into account things like hard braking, or unsafe cornering when calculating an insurance premium. Some of these systems are sophisticated enough to know when you are speeding.
It is not just drivers who are experiencing great benefits from telematics insurance. Insurers have a lot to gain by being able to pick their clients premium based on how well that specific client drives. It eliminates many of the unfair practices of overcharging good drivers just because they belong to a particular group of people. Many insurers are gaining new customers by offering telematics insurance. Underwriters also save a lot of money on investigations into accidents by doing business with good drivers.
There is evidence that this new type of insurance is also causing people to drive better by rewarding their good behaviour and punishing risky behaviours Its even possible for you to be alerted every time you are engaging in dangerous behaviour.
Some people are concerned about privacy with the advent of these new black boxes, however, companies often offer the ability to opt-out of location tracking. More exciting is that at some insurers you can use the device for just 6 months and then stop using it, while retaining the discount you’ve earned from those 6 months of driving.
Customers are enjoying the personal approach to their insurance premiums, which is leading more and more people to adopt black box insurance. As car insurance costs continue to rise, black box insurers are becoming increasingly more appealing. While it is valuable to engage in a telematics insurance scheme, you should be aware of the data that gets collected by your box, and how its used to calculate your premium.
Without the valuable data from telematics, insurers are forced to rely on actuarial data that focuses on aspects like age and how many claims you’ve had in the past. The great thing about this service is that you get a wide range of free added on services such as emergency warning services. Many insurance providers will call the police and ambulance for you if your in an accident, which could be life saving should you become unconscious.
How The Black Box Works
How it works is a small black box is attached to your car, records your driving behavior and reports it back to your insurer.
The better your driving is, the lower your premium. The insurance scheme is particularly valuable for young drivers who benefit from the reduced costs. Should you decide to engage in a telematics insurance policy then you will have a box outfitted to your car, typically for free. The box is quite small, usually no more than the size of a cell phone and often is hooked up to your dash.
The box not only monitors where you drive it also keeps track of your handling skill. Everything from:
What it means for you is that your insurer can tell whether you are stuck in rush hour traffic everyday or drive on the highway with great frequency. Even more exciting is that you can go online to a website to monitor your driving history and how your insurer is using that information to calculate your premium.
You can even stay on top of your driver rating just by looking at the number on your dashboard. It will tell you where you stand and give an accurate assessment of what to do. Another advantage of the black box is that if your vehicle is ever stolen, your insurance provider can track it down for you. In fact, statistically, 97% of cars stolen with a black box were recovered in 1 hour.
The word black box comes from the black boxes used on planes. The black box on an airplane records the system changes along with any problems the plan experiences. It also keeps track of the audio that goes on in the cockpit. Should an accident or damage happen to the plane, the black box provides the essence data for aircraft examiners. You can think of your black box as much of the same thing as the ones used on airplanes.
Will My Warranty Be Affected By Installing A Black Box?
Your insurers authorized black box should have no affect on your manufacturers warranty.
Can Women “Balance The Scales” After The Recent EU Ruling?
After the recent EU verdict on barring insurance providers from providing premium prices based on a persons sex, women everywhere are paying higher premiums. This is unfair for many women who are safer drivers than their male counterparts. Through telematics, you can get back to a fair and accurate premium based on your real level of risk.
Three Different Types of Black Boxes Available
The Port OBD-II
Established in 96, the American cars have a onboard system that checks the cars computer and systems. Mechanics typically use this to diagnose problems on the car and to gain valuable insight into the cars problems. The typical telematic black box just taps into this existing system. It enables it to get all the data from the OBD and sends the data over to your insurance provider. Then at your insurers location they analyze the data and come up with a score for your driving.
Interactive Media Devices
These new devices also don’t hook up to your existing OBD but collect a lot of the same information that it collects. They use GPS to track various important pieces of data about your vehicle such as the speed you travel at and how far you drive. Some of the devices even include feedback systems where a computer will tell you how to drive better in real time. You get notified if you are turning your corners too quickly or are braking too strongly. All of this data is sent over to your insurer for them to analyze.
There is also a range of smartphone apps that enable you to use your phones accelerometer and gyroscope along with GPS to monitor all of the important pieces of data. It also enables you to take advantage of your cell phones existing network connection to transmit the data to your insurance company. These devices can generate a huge amount of information and could result in expensive charges if your plan is not adequate. You should make sure you are clear about how much cell phone data will be used for your insurers data.
Some of these devices can collect as much as 30 different pieces of information every second and send them to your insurer. This could result in huge dumps of data from your cell phone if your insurer doesn’t have a good information management plan in place.
How Your Premium Is Calculated
Telematics enables many people to save if they know how their premium is calculated and watch their behaviour on the road accordingly.
With a normal insurance plan you will subjected to a wide range of biases that could result in overpaying based on factors like:
> Your age
> Your job
> Your car
That doesn’t look at what kind of person you are or how safe of a driver you are. It is all about biases that work out statistically. If you happen to be quite a safe driver then your premium could be calculated at a much lower rate.
When you typically drive your vehicle along with how you choose to drive are some of the biggest risk factors for an accident. If you are someone who avoids dangerous driving conditions, your insurer can now verify this and provide you with a premium that better reflects your real risk of an accident.
Telematics insurance policies allow for you to drive a certain amount of miles every month. If you should go over this mile limit then you usually need to pay an additional fee. However if you exhibit good driver behaviour insurers will often give a bonus for additional miles at no charge.
Pretty much all of the insurers use more or less the same technology but how they implement that technology can change.
Some insurers give you a specific number of miles that you may use per year, and then if you have good behaviour you get additional free miles. You can also be deducted miles for taking on dangerous driving habits and conditions. These include things like rush hour traffic or driving after midnight.
Another option is to simply pay your cover based on how many miles you drive, without worrying about how many you take up. All of the information on your driving history from the black box is collected and used in calculations for your future rates.
Your information from your black box can be used to help defend you in the case of an accident lawsuit. It provides valuable data about how your were driving before the accident, and where your vehicle was located.
It is important to remember that should your car stop moving or show signs of trauma after an accident you may be called by your insurer to see if you need help. Your insurer may also notify the local police and ambulance if things look serious.
Summary of The Advantages of Black Box Insurance
The telegraph suggests that the biggest advantage of telematics is the great savings it offers http://www.telegraph.co.uk/motoring/news/9858410/Can-telematics-make-your-car-insurance-cheaper.html
Lets go over all the benefits:
You can experience significant savings over normal car insurance by basing your premium upon your driving ability and risk factors, instead of biases set in your age and occupation type.
The box encourages people to drive safe and lowers your risk of an accident through live feedback. You save money as you become a better driver. The average premium is cut by 25% through this service
Young drivers, and motorists with convictions can often pay unreasonably high premiums which can be dramatically cut through the box
You can track down your vehicle if it is stolen
It can assist in proving your case if you should have an accident
If you don’t drive very often you will get a lower premium, so you only pay for your actual use of your vehicle and your driving skill
Lack of experience in driving does not have to force you to overpay on your premiums
Disadvantages of Black Box Insurance
Some policies do not allow you to drive between the hours of 11:00 pm and 5:00 am because they have the highest probability of an accident
Higher premiums are charged if you drive during rush hour
Higher premiums are charged if you live in the country where road conditions are more dangerous
There can be restrictions on where and when you can use the car
Privacy issues, you will need to check your insurers policy on privacy
Some insurers charge for their black box
Changing where you live or where you work could impact how much you drive and could impact your policy
Innocent speeding mistakes could affect your policy
Black boxes don’t differentiate between drivers so multiple drivers could lead to one driver paying for the mistakes of another
The presence of the box itself can be stressful for some drivers
Now you know a bit more about telematics technology to make a telematics comparison but it is still highly recommended to read telematics car insurance reviews and telematics auto insurance guides.
See here for the best black box insurance for young drivers.