The hidden costs of car insurers’ ‘black box’ devices which are designed to lower premiums
The 'black box' device monitors car activity to allow insurance companies to reward careful drivers with discounts, which can be helpful for younger drivers
INSURERS are urging drivers to take out “black box” policies to lower their premiums – but look out for the catches.
The telematics devices monitor car activity so allow insurance companies to reward careful drivers with discounts.
The boxes can help younger drivers paying higher premiums prove they are safe on the roads.
Drivers aged 18 to 24 typically pay £1,544 a year but can save around £400 a year with a box.
Older drivers and those with convictions for speeding or who have been involved in an accident can benefit too — as they can show they are now safe on the roads.
The average driver can save £482 with a black box device, according to comparison site Compare The Market.
The devices monitor acceleration, speed and harshness of braking, as well as mileage and the times of day drivers go out.
But are black box insurance deals as good as they claim? Our research found many come with added fees hidden in the T&Cs.
HIDDEN COSTS
The cost of the black box and its installation — from £100 to £228 — is included in the quote for the first year.
For two in three younger drivers, the total policy price is still cheaper.
But if you miss the installation appointment or if your car is parked in an “inaccessible” place, you face £50 to reschedule.
When it comes to renewal, drivers can be charged a “device management” or “data management” fee for the black box.
This is £50 with Sky Insurance, £60 with Ingenie and £62.50 with Autosaint.
Drivers will be asked how many miles they drive when they take out the policy, and because the black box knows exactly how many you do, you are likely to be hit with extra charges if you go over your agreed mileage.
Keep an eye on your limit and call up to extend if you get close.
You will still have to pay more towards your premium along with an admin fee, usually around £25.
TYING YOU IN
A third of drivers are worried about being stuck long-term with one insurer because most have their own black box technology which is not compatible with other insurers.
Coverbox charges £60 to remove a black box, while Hastings Direct charges £90.
Dan Hutson, from Compare The Market, said: “Our research suggests that if drivers were able to take their black box with them, over a third more people would consider purchasing telematics and would potentially save a lot of money.”
If you change your mind about having a black box during the policy, you may be hit with even higher cancellation charges.
And there can also be big fees if you change your car.
MOST READ IN MONEY
PUNISHMENTS
Prices are based on your driving score. If you speed, brake heavily or drive dangerously, it will lower your score and you get a warning — either through the app or over the phone.
Even doing 25mph in a 20mph zone could land you with extra costs or even a cancelled policy.
With many policies, more than one warning within a short period of time — 30 or 60 days — can lead to a fine or the policy being cancelled. The latter makes it very expensive to get insurance in future.
With Sky Insurance, if you get three warnings within 60 days, your premium will increase by £100 and you will have to pay an extra admin fee of £25.
The warnings may seem harsh but they have cut accidents. Insurethebox contacted 80,000 drivers about their speed and saw a nine per cent drop in accidents — the equivalent of preventing 1,000 crashes.
Drivers who work night shifts could also be penalised because many insurers will lower the driving score of people who use their car between 10pm and 5am.
'I was caught out by fee'
TRAINEE carpenter Jack Fitzgerald fell foul of the small print when he tried to sell his Vauxhall Corsa midway through his black box policy with Admiral.
Jack, 19, from Frimley in Surrey, says: “I decided to sell the car as it was not going to pass the MoT.
“But when I rang up to cancel the policy, the firm said I had to pay £100.
“It was the first I had heard about any fee and it left a really bad taste in the mouth.”
Admiral charges a £59.50 fee if a customer changes car and transfers the black box to their new one.
There is a £100 fee if the customer chooses to have the box removed during the policy and a disconnection fee of £100 if a customer cancels their policy.
There is no fee if a driver simply chooses not to renew at the end of the policy.
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