Black box insurance explained

How does telematics work?

Telematics technology transmits information about how you drive to your insurer.

GPS data can be recorded and sent using a small black box fitted into your car, however, other data collection methods are becoming available.

In Ireland you may be offered:

• a black box device installed in your car by an engineer
• a device that plugs into your car’s power 12v outlet
• a freestanding smartphone app

With most black box cover you’ll also get feedback on your driving via a dashboard or app which will refine your driving skills and reduce the chance of accidents.

What does a black box record?

Telematics devices use GPS technology to log information about how you drive.

Your insurance provider wants assurance that you drive safely and aren’t driving in a risky way, for example, speeding or braking too hard.

This type of driving is more likely to cause an accident, which means there’s a greater chance that you’ll make a claim on your insurance.

If you drive sensibly, a telematics device can provide evidence that you are cautious and low risk, so less likely to make a claim.

Benefits of black box insurance

Besides, earning you a discount for safe driving, there are several other advantages to getting a black box fitted. For instance, you may benefit from:

• A simpler claim process because driving incidents are recorded and fault can be established more quickly. It may also help combat fraud by enabling insurers to identify false claims
• A real-time ‘driving score’ and feedback via an app to improve your driving and encourage safe driving which could reduce your premiums
• Extra perks like a courtesy car if you are left without as a reward for having a black box installed
• Quicker help in an emergency because if you break down or have an accident in a remote place or your car gets stolen the GPS system makes your car easier to locate.

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Is black box insurance cheaper?

It depends on your circumstances and your driving habits. If you’re considered a high-risk driver and subsequently demonstrate safe driving it can reduce future premiums.

However, other factors such as the make and model of your car and your profession will also impact the price of your quote, so cheaper car insurance is not guaranteed.

Monitored driving works both ways and you may lose any discount and get penalised with higher premiums if your telematics device indicates you’re regularly driving in a risky manner.

Examples of risky driving are:

• speeding
• braking too sharply
• accelerating too quickly
• driving at night

Are there any disadvantages to black box insurance?

Despite lots of benefits, there are a few drawbacks to watch for.

If you damage your box you may be charged for a replacement or if you decide to cancel you may be charged for its removal.

If your driving is poor, for example, you often speed and take corners too fast, you could end up paying higher premiums or even have your policy cancelled.

You may have to wait to see a drop in your premiums because some insurers only set your discount at renewal.