Backseat Big Brother: Is the insurance companies' 'black box' worth it?

Charlie Cooper investigates the in-car device that monitors your driving in exchange for cheaper insurance.

Ah, passing your driving test. What a glorious watershed of liberty in the lives of thousands of Britain's young men and women. That first car key doesn't just unlock the driver-side door, it unlocks the freedom to stay out later than the last bus home, the freedom to tactlessly woo that girl from school who lives in the next town, the freedom to never spend another Friday night in with mum and dad watching repeats of Blackadder.

It is the modern rite of passage that says "I am an adult, I will go where I will and play my music as loud as I like. With the windows open. On a Sunday." But it would appear that the liberty of young drivers is under threat from an insurance industry whose quotes for drivers under 25 routinely run into thousands of pounds.

The Co-operative Insurance announced recently that it has signed up 20,000 young men and women in the trial year of its tailored "Young Driver Insurance" scheme.

The premise is simple. The Co-op will offer significantly reduced rates on insurance premiums which, for young drivers, are usually sky high. The only catch is, the young driver must have a device installed in their car that watches their every move and calculates how safe or dangerous a driver they are. Drive "well" and you'll keep your discount. Drive poorly and you could see it disappear.

It's all a bit Big Brother. The telematics device – unnervingly known as the "black box" – is available from many insurance companies and has been driving down premiums for the savvy few for some time now. Lately, it has really begun to catch on and, alarmingly, some companies are now subtly marketing the insurance policies at parents keen to keep a beady eye on their offspring's driving. The readings that your black box makes can be analysed online. Each policy varies slightly, but for the Co-Op, the factors that are measured are: speed, cornering, braking and acceleration and, interestingly, the time of day you drive – night driving is statistically more dangerous than daytime. It is also a time of day that young people might want to be driving.

However, seeing as I still fit into the 17 to 25-year-old bracket that the insurance policy covers, I decided to put my driving to the test and see if I could drive down my insurance premium.

The initial signs were good. Just by having the device in the car – a little red Nissan Pixo – my insurance premium was a good £400 cheaper than the best offer on the market: only £671. My mission was to keep it that way.

It did not go well. Driving a car with a black box installed is like having someone sitting in the back seat, tutting constantly. I could imagine the box's outrage every time the speedometer crept over 70mph (Ok , 80mph) on the motorway. "Oh," it seemed to wail, "don't overtake! That's terrible for your acceleration/braking score!"

By the end of my first few days, it was not looking good for my insurance premium. Granted, I had driven the car from London to Leeds, round some questionable country roads in the Yorkshire Dales and then back down to London again – horror of insurance horrors – at night!

There will be many (and most of them will be parents of teenagers) who will consider that young drivers having to worry about paying for their speed and acceleration is no bad thing. Motorists aged between 17 and 25 are responsible for one third of road fatalities in the UK and one in five is likely to be involved in a crash in their first 12 months of driving. Anything that can make people drive safer and at the same time, save people money, is undeniably a good idea. Amy Kilmartin, young-driver product manager at the Co-operative, said the company was marketing the insurance both at young drivers and their parents.

"Parents tend to be the ones that make the decisions and pay for insurance, so it's important that we get them involved," she said. "The scheme is everyone's best interests. Parents can encourage safer driving and young drivers get a lower premium."

But there are flaws in the machine. "The black box is not a panacea," says Peter Rodger, chief driving examiner and head of driving standards at the Institute of Advanced Motorists. "A black box only tells you what a vehicle is doing, not what a driver is doing. If a driver needs to break sharply to avoid an impact and they brake softly to please the black box you can have some bad unintended consequences.

"Black boxes, in principle, are a good supervision tool, but a weak training tool. They tell you when you've done something wrong, but they don't tell you what to do with it."

Rodger says he has heard of a case in which an insurance premium shot up by £150 because of one night drive – undertaken by the policyholder's mother. It certainly is a blunt instrument and the inclusion of night-driving as a factor that can affect an insurance premium is bound to put off many people.

"You can structure policies in all sorts of ways and if they support the lives that young people need to live then that's a good thing," says Rodger. "If you structure them so that they become punitive to the things that young people need to do, then there are problems."

Personally I was not particularly fond of my black box. My ordinary driving style (perhaps a little speedy on the motorways) and the occasional night drive, were driving up my premium. More than that, the sense of having someone looking over your shoulder the entire time is somewhat unsettling. It would appear, however, that telematics devices have a bright future in insurance. (Although, as I found out to my cost, it can't prevent break-ins, see above).

Research by the British Insurance Brokers' Association last month revealed that sales have increased five fold in two years and that in two years more, there could be 500,000 of them on the roads.This will please mum and dad, forming part of a trend to more parental control of young people's driving habits. Ford will soon be launching the European version of an even more intrusive technology: the MyKey, which has been a hit in the US.

The MyKey allows parents to programme a car to beep furiously at a young driver he or she goes above a certain speed and can even set a volume limit on the car radio.

You can blame the parents, but after all, they're the ones who tend to be paying for the insurance. Sadly for the 17-year-old of the future, the car may no longer be the automatic ticket out of the parental nest it once was.

They're just getting a bit too clever for their own good.

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