'Black box' helps to cut accident figures by a fifth
Telematics is reducing the cost of premiums as well as making the roads safer for motorists.
A little black box that sits in your car and uses satellite technology to discover how well you drive has had a dramatic effect on accident figures.
Analysis of 10,000 claims has revealed that drivers with telematics insurance – which uses the black box – are 20 per cent less likely tohave a car crash than those with standard insurance.
The boxes are normally aimed at young drivers for a simple reason – the information gained from them can help insurers reduce the cost of premiums. That's particularly useful for teenage drivers who have no track record and usually attract very high premiums because of the high number of accidents recorded by those in their age group.
A 17 to 22-year-old driver is often charged thousands of pounds for cover. But by using telematics, motorists are rewarded for good driving habits by lower premiums or cashback. The black box analyses speed, cornering, braking, acceleration and the time of day the car is driven, to spot better driving habits.
Co-operative Insurance launched its Young Driver scheme a year ago and it has run the rule over 10,000 claims it has received since. It says the data proves that as well as having fewer car crashes, young drivers with a black box are involved in less-serious road accidents. The cost of a typical insurance claim from a customer with the box is 30 per cent less than from a customer without.
The AA launched its own telematics cover in January, and other firms are turning to the benefits it offers. The chief attraction is that it allows insurers to offer individual pricing, rewarding those who are sensible behind the wheel.
For that reason, it could help women drivers who face insurance hikes later this year. From December, a new EU ruling will ban insurance companies from charging insurance on the basis of sex. It means women drivers – who at present pay less because of their better claims record – will be forced to pay as much as men. "This isn't fair as women are statistically safer drivers than men," said Amy Kilmartin, manager of the Young Driver Insurance scheme at the Co-op. "But if they use black-box insurance, they can prove they are safe drivers and get cheaper insurance as a result."
In short, safer drivers will be the ones who benefit from having the black box in their cars. Along with the Co-op and AA, it is offered by specialist firms such as Young Marmalade and Insurethebox.
They were joined last week by Autosaint, which claims its premiums are up to £1,900 cheaper for young men and £600 less for young women when compared with the average car insurance premium.
"We believe young motorists' premiums should be calculated based on how safely they drive and not how much of a perceived risk their sex suggests they might be," said Stuart Whalley of Autosaint.
The Co-op's director of general insurance David Neave said more firms should use telematics. "It would be great to see more insurers follow suit. Telematics has a key role in cutting insurance costs and avoiding creating an uninsurable generation."
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