Telematics-based or ‘black box’ car insurance could become the norm for young drivers within two years, says the Institute of Advanced Motoring (IAM). The ‘black boxes’ are typically placed inside a dashboard and use GPS and motion sensors to monitor factors such as speed, acceleration and braking, as well as recording the times when the car is in use. The data is used by insurers to track how safely young motorists are driving, and has a direct impact on the cost of the driver’s insurance premium. Drivers can actively lower their premiums by demonstrating safe driving. On the other hand, if they speed or drive in an inappropriate manner, their premium could go up, so there’s a strong incentive to stick to the limit and drive sensibly.
Insurance companies, including Ingenie, which focuses exclusively on young drivers, have been quick to highlight the cost and safety benefits of this technology. The ‘black box’ acts as a co-pilot, giving the driver useful information about their driving, says Ingenie, refuting critics’ claims that the boxes constitute an invasion of privacy. Drivers receive feedback on their driving via their smartphone or via the company’s website.
Sales of motor insurance policies using ‘black box’ technology have increased fivefold over the past two years, reports the British Insurers Brokers’ Association, with some drivers knocking 25% to 30% off policies, and saving up to £1,000.
“Black box technology makes sense for young drivers,” says Christine Joyce, Managing Director, CJAM. “It helps them learn how to drive safely and lowers the cost of motoring. Interestingly, US medical research shows that the part of the brain required to act correctly and make considered decisions doesn’t mature until the age of 25, which could explain why one in five young drivers has an accident within 12 months of being on the road.”
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