Black box insurance, also known as Telematics Insurance or Usage Based Insurance is becomingly increasingly common. The idea underlying black box insurance is that your auto insurance costs are based on your actual driving behaviour rather than which demographic group that you belong to.
In order to accurately determine your driving behaviour a “black box” roughly the size of a mobile phone is installed in your car. This device tracks various aspects of your driving and then delivers this information to a remote server where is analyzed by your insurance company. For safe drivers, installing the black box technology means lowered premiums.
One question that many drivers have about black box technology is “what things are taken into account when measuring my driving performance?” Below you will learn the answer to that question, so you can decide if you want to opt in and have black box monitoring technology installed in your car.
What time of the day the car is used
The time of day when a car is driven can have a significant impact on the likelihood of being involved in a serious accident. 40% of all serious and fatal accidents occur between the hours of 11pm and 6am. Consequently drivers that are on the road during those hours will pay a higher premium than drivers who only drive during the day. People who drive during rush hour will also be charged higher insurance premiums than those who avoid this period of the day.
On what type of roads the car is driven
Because of GPS technology the insurance company can evaluate which roads you are most frequently driving on. Then based on data about the frequency of accidents on those roads they can determine whether you should be charged higher or lower insurance premiums. For drivers looking to lower their insurance costs they will want to consider the roads that they choose to drive on.
Speed, cornering and braking behaviour of the driver
The actual way you drive will help to determine your insurance premiums. Insurance companies have a large database of the types of driving behaviour which lead to lower incidence of accidents. The three key criteria that they look at are how fast the customer drives and if they exceed the speed limit, how they use the brakes of the car and how they handle cornering the automobile.
Over time the driver can build up a history of safe driving data, which will lower their insurance premiums. This is particularly important in the light of new laws from the EU which prohibit insurance companies discriminating based on gender. By having a black box installed in their car, females who statistically should be charged lower insurance costs, can demonstrate their actual driving behaviour.
Number of miles driven
The number of miles driven is another important determinant of insurance premium costs. All else being equal, the driver who is on the road more often is more likely to be in an accident than someone who drives infrequently. The proverbial old lady, who only drives her car to church to Sunday, is unlikely to be an accident simply because she is not on the road very often. Where as someone who spends two hours every day commuting to work is exposed to greater risk of an accident. With black box insurance the miles that they drive each week will be reflected in their insurance costs.
Data preceding an accident
Black box data is also used by insurance companies in the case of a car accident. The black box can accurately record the date and location of the accident an in addition records a slew of other information as well. This other data includes the vehicle speed, the engine speed, whether airbags were deployed, if seatbelts were used, the steering angle, braking status, throttle position and the force of impact.
This information will be then used to determine how the claim is managed. Accident reconstruction specialists will analyze the data to determine the cause of the accident. Obviously in the case where the driver is shown to be not at fault, the claim can be expedited without delay. This can also help to avoid having your insurance premiums increased in the future, even when the accident you were in was no fault of your own.