Young drivers have a habit of crashing cars, sometimes through inexperience and often through bravado – and frequently because of the two combined. Not all young drivers behave so recklessly of course, but until relatively recently, insurance companies could only go by statistics, so they’ve long struggled to treat drivers as individuals. Not any more, as modern technology allows insurers to monitor how their customers drive, to see just how safe (or otherwise) they are. Thanks to the use of telematics, or black box technology, young drivers can now prove to their insurer they’re not a liability.

Norwich Union introduced telematics in 2005, but gave up on the tech soon after because so few people signed up for it. But the promise of slashing premiums has led to huge numbers of drivers opting for it over the past couple of years, especially young drivers. It was ikube, Coverbox and insurethebox that led the charge, launching their schemes in 2009. By the start of 2012 a stack of new players had joined in, and since then that number has mushroomed.
A telematics policy sees the insurer fitting a tiny box of electronics into someone’s car to monitor their driving. The box is usually free, hidden out of sight and it’ll tell the insurer the car’s speed, where and when it’s being driven, how harshly the brakes are being applied and how fast it’s being driven round corners.
As well as these aspects, the black box can also log how many miles the car is driven over the year as well as whether breaks are being taken on long journeys. So if the car is driven continuously for hours on end, an issue will be flagged up, as regular breaks are an important part of driving safely.
With the insurer underwriting tens of thousands of policies, it’s not as though there’s somebody actually monitoring in real time, as it’s all done by software. While this does constantly monitor how the car is being driven, it focuses on trends rather than individual misdemeanours. As a result the premium is recalculated on a rolling basis.
In the case of young driver insurer ingenie, if a driver is flagged up who regularly drives badly in some way, they’re contacted by a Driver Behaviour Unit (DBU) and given guidance on how they can improve. In most cases they take that advice on board and have upped their game within a month, sometimes because they don’t want to crash and sometimes because they don’t want to jeopardise their discount for good driving. Whatever the reasoning, what matters is that they drive more carefully.
It’s not just the insurer who can keep tabs; most offer a portal through which the driver and their parents can monitor the standard of driving. And because the black box does the same thing as a tracking system, any car fitted with one can be found more easily if it’s stolen. Plus if the car is crashed, the black box can alert the emergency services so they get to the scene more quickly.
Perhaps the biggest benefit of all though is that with a black box fitted, most young drivers are more aware of how safely they’re driving. One of the insurance companies at the forefront of black box technology is ingenie, which published a Young driver report earlier this year. It makes fascinating reading because it gives a wide-ranging insight into the world of the young driver.
The report covers far more than just insurance and includes some interesting stats, such as the fact that 69% of drivers reckon their black box has helped them to become a better driver. The same report also revealed that during 2016 there was a big jump in the number of people taking out black box insurance, to the point where by the start of 2017 there were no fewer than 750,000 live policies. So black box insurance has definitely become part of the mainstream.
The beauty of the black box is that with one fitted it opens up a whole world of possibilities for young drivers as well as insurance companies. The technology had led to a raft of new products being introduced, including one which allows young drivers to take out their own policy on the family car, in tandem with the car’s owner. This saves the young driver from having to buy their own car and when they’re not driving, the car isn’t monitored so the parent doesn’t have to feel that they’re being watched. The young driver logs on via an app when they start driving and as soon as they switch off the car they’re logged off the system and their cover ends. This product allows the young driver to build up their own no-claims bonus as they’ve got their own live insurance policy.
If you’re a young driver you’d be daft not to consider opting for a telematics scheme for your own cover, but don’t assume it’s automatically the best route; some drivers can still get cheaper cover with a conventional policy. You must also check the terms and conditions, as some insurers might not like the way you use your car. For example, some policies restrict you to driving between 6am and 11pm; do any night driving and you could find yourself paying a hefty penalty.
If you take out a black box policy you’ll probably initially pay much the same as for conventional insurance. But by driving well the high-tech route can see that premium plummeting, perhaps by as much as three-quarters (75%) after just a year. You won’t get that with a conventional policy, which might go down by just a fifth (20%) or so. So while you might not like the idea of being monitored, you might just find that the telematics option allows you to get on the road – instead of being priced off it.
Richard Dredge
August 2017