Student saved £640 on her car insurance using a little black box – here’s how you can do it too
With telematics insurance your insurer will know when, where and how you drive
Amy Cross, a student from Herefordshire, is part of a growing number of people using new technology to cut their insurance costs.
Insurers are willing to lower your premiums if you prove you are a safe driver, and in just one year the 18-year-old managed to cut her bill in half.
Telematics insurance policies involve fitting a little black box device to your car that monitors your driving.
In the first year of driving, Amy's insurance premium for her Ford KA cost £1,200 with Insure the Box but this was dropped down to just £560 after 12 months.
A similar non-telematics policy for an 18-year-old female driver living in Herefordshire, who is still at school and keeps the car on the road but close to the house overnight, would cost around £1,365.
Amy said she drives carefully, in the knowledge that her driving style will impact her premiums, but "doesn't feel restricted" by the rules, as she drives safer as a result.
She said: "Having telematics insurance makes me for mindful of how I drive, and makes me pay more attention to it. The safer I drive, the cheaper my insurance becomes, so I'm really happy with it."
Insure the Box rewards safe drivers with 100 bonus miles each month when they demonstrate safe driving, and the bonus mile scores are looked at by the insurer when a customer comes to renew their policy. The higher the mileage, the lower the premiums.
Amy has to date received 276 miles out of a possible 300. She said: “The thought of a telematics box tracking my driving I must admit, did not sit comfortably with me when my parents first discussed the idea with me.
"However, when we talked through how it was about keeping me safe on the road and helping me to improve my driving and be the safest driver I can be, I agreed to it.
"The safer I drive, means the more bonus miles I can get and that is quite motivating each month as your insurance company is rewarding you personally for the way you are driving."
Telematics insurance is growing in popularity, as drivers look at new ways of combating soaring car premiums.
Average premiums now cost around £535 a year, seven per cent higher than they were last year, and 28 per cent higher than in 2015, data by MoneySuperMarket shows. And young people face even higher costs, with many paying over £1,000 a year for cover.
As a result, more people are turning to telematics insurance, with figures by The British Insurance Brokers’ Association (BIBA) showing a 65 per cent increase in telematics policies between 2016 and 2017.
How to cut your car insurance premiums
IF you have a standard policy, there are a few ways you can cut your bill.
- Shop around for the best deals. Simply rolling the policy over with the same insurer – what’s known as ‘auto-renewal’ – means drivers are almost certainly paying more than they need to. Use websites like MoneySuperMarket, Gocompare and Confused.com to compare deals
- Add an extra driver to your policy. It is illegal to claim someone is the main driver when they’re not, but adding a secondary driver can save you some money and is within the law
- Pay for your premium in full. If you can afford to stump up the cash outright, pay for your car insurance in annually rather than monthly as you could make big savings
What is telematics insurance and how does it work?
Telematics technology works by putting a black box in a person's vehicle - or on the driver's phone - to monitor the style of a person's driving, for instance their speed, cornering, acceleration and breaking. The black boxes also store the location and time of drivers' journeys.
So while telematics has been proven to lower insurance costs, you'll need to be prepared to share more data with your insurer, about when, where and how you drive.
Insurers then use this information to assess the risk of the driver. The safest are rewarded with the biggest discount, while those who drive erratically could see their premiums rise.
Insurers decide how to reward customers who drive safely. Some will give lower premiums from the outset, while others give discounts for good driving.
Telematics: is it always a good idea?
There are a number of benefits when it comes to having a black box in your car, including the potentially huge savings made over normal car insurance - if you're a safe driver.
Graeme Trudgill, executive director at BIBA, said telematics policies can offer savings of up to 25 per cent for careful drivers.
He said: “It is encouraging to see such a big take up of telematics policies. Motor insurance premiums for young drivers are higher than for other drivers because statistically they have more accidents, but the safety advantages of telematics help to reduce users’ premiums.”
But there are drawbacks to telematics insurance, too.
Some policies will punish drivers who drive frequently, and late at night (because there is a higher probability of having an accident at this time), meaning drivers can feel restricted by their policy about when and where they drive.
Some drivers are also reluctant to hand over private data to their insurer, and are against the Big Brother technology spying on their driving and recording their movements.
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