Finding affordable car insurance is never an easy undertaking. However, there are ways and means of reducing these pricey premiums down to something more attractive, and black box (also known as telematics) car insurance is said to be one of the most effective.

Unsurprisingly, black box car insurance is now a popular option, with more and more motorists opting for this type of policy. Here, we’ll go into what black boxes are, how they affect insurance pricing, and who can benefit from them based on their driving habits.

What is black box insurance?

Black box insurance is when a telematics box monitors how you drive; it’s a small box about the size of a smartphone that’s installed in your car. Most of them have a GPS, motion sensor and SIM card that are used to send information to your insurer.

The box is typically installed in your car, which then relays information about your driving to them by satellite. They then calculate your premium based on your driving performance, offering lower prices if you’ve been driving safely.

In terms of metrics that are monitored, the black box tracks your speed, braking, acceleration and cornering. Additionally, it also looks at the time of day you drive, and the number of miles covered, along with the type of roads you drive on.

What does a black box do?

A black box is a device that uses a variety of sensors to monitor your driving to assess whether your car insurance should be more or less money.

There are a variety of ways to install a black box, sometimes it doesn’t require any installation at all, coming in the form of a smartphone app with no additional hardware needed.

Policies can differ among insurers. Some constantly monitor your driving, sending data after every day or journey, while some only require you to use the box for a short period.

In the case of the latter, you’ll be monitored for, say, three months. After this period, you’ll return the box and your insurer will adjust your premium based on the data collected.

This gives drivers an incentive to drive carefully to reduce their insurance premiums.

Installing a black box

There are a few ways that a black box can be installed in your vehicle that range in terms of difficulty to install. Here are the main ways:​

Self-installed

A self-installed black box will be sent to you in the post, once you take out your policy. Installation instructions will be included, but they all follow roughly the same routine of locating your OBD port and simply plugging it in. It’s important that you install your box as soon as it arrives, as your policy could be cancelled if you don’t install it within a certain time frame.​​

​Mechanic or insurer-installed

In some cases, a professional will be sent out by your insurance provider in order to install the box. This could be due to the car being an older model, or not having a suitable onboard diagnostics port.​

Smartphone app

​The easiest option that an insurer can offer is to simply ask you to install a smartphone app that you turn on for each journey. It uses the sensors within your phone to give the same metrics that a dedicate black box device would.​

What are the pros and cons of black box insurance?

There are a number of advantages to having a black box, but also some disadvantages that you should consider before you commit to having one installed.​​

Pros:

• ​Pay less for insurance renewal: ​The most obvious benefit to a black box is the reduced insurance premiums for good driving. Driving safely for the first year will mean that your premiums are reduced in the second year.
• ​Drive more safely: ​The most important benefit is that drivers are encouraged to drive safer because they are aware that they’re being monitored. Metrics continuously show that black box drivers are safer than those without a black box fitted.​
• ​Save money on maintenance: ​Due to safer and more efficient driving, you are likely to save money on car maintenance such as tyres, brakes and fluids.​
• ​GPS tracking: ​Due to the nature of a black box, it can track your car even if you’re not the one driving. Should your car be stolen, the insurance company can track where the car may have been taken to.​​

Cons:

• ​Higher premiums: ​A black box doesn’t necessarily guarantee you lower premiums, if your driving is poor, you will be punished with higher renewable premiums.​
• ​Restrictions: ​Some insurers may limit the times of day that you can drive or even the amount of miles you can drive, which may not be an option for those who use their car for things such as work.​​

Good driving habits to consider if you have a black box

As well as having a black box for the purpose of lowering your insurance premiums, it’s important to consider that it can make you an all-round better driver. So, what are some good habits you should start adopting when behind the wheel, even if you don’t have a black box yet?

Driving safe and steady

Accelerating smoothly and braking slowly will let your insurer know that you are a responsible driver.

Sticking to the speed limit

A key element of safe driving is staying within the speed limit. Remember the speed limit is a limit and not a target.

Keeping an eye on your mileage

A black box will monitor your mileage, and your insurer may increase your renewal price if you are consistently driving over your agreed mileage.

Check your policy for driving at night

Some policies don’t allow for night-time driving because it is generally considered to be more dangerous, check your policy before you take the risk and increase your premiums accidentally.

What happens if you speed with a black box?

We’d never recommend speeding with or without a black box, but it is especially important with a black box. Speeding with a black box will negatively affect your driver score and could lead to higher renewal premiums.

Excessive or frequent speeding can lead to your insurer cancelling your policy early.

Who is black box insurance for?

• Young and new drivers: 17-24-year olds are the most likely to make a claim and therefore the most expensive to insure. Rather than tailoring things to everyone in your age range, black box insurance’s individual approach could pay off nicely.
• Careful drivers: Sensible drivers take note, a black box policy could prove how careful you are to your insurer.
• Low—mileage drivers: If you don’t drive much, then the fewer miles you cover, the less you tend to pay.
• Daytime drivers: If you rarely drive at night, you could save yourself a decent chunk here too.
• NB: If you’re an experienced driver with a good number of no claims behind you, it’s unlikely that a black box policy will be of benefit. Your no claims are already an illustration of your safety as a driver, and will offer a better discount (up to 75%) than a black box policy.

How much does black box insurance cost?

There are several fees that you might want to take into consideration before you opt for black box insurance. The following could affect how much your black box insurance policy could cost:

Change of vehicle

If you buy a new car but still want to carry on using your black box, some providers charge you a fee for the privilege. Additionally, some insurers will also charge you a fee for switching to a new vehicle even before the box is installed.

Missed installation

When you sign up for a black box policy, your provider will set an installation date for the fitting of the device. If, for whatever reason, you miss the date, it’ll result in additional charges.

Black box disconnection

When your policy ends and you opt for a different provider, you don’t have to remove the box, but it will need to be switched off. While most providers do not charge for this, some of them do, so take note when you sign up.

Box removal

If you insist on having the box removed, however, then you could well be charged for its removal.

Traditional car insurance fees

As well as the above fees, black box providers charge many of the same fees as traditional car insurers. This includes an APR if you pay monthly, cancellation charges and duplicate document fees.

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