Black box saves young drivers' lives and wallets
A dashboard device can help motorists under 25 improve their safety and cut their premiums. Alister Foye reports
Saturday 27 April 2013
Young drivers getting behind the wheel of a car does not just make their parents sweat, it gets insurers hot under the collar, too.
The almost three million drivers under 25 on UK roads are paying an average of nearly £2,000 in insurance each year, according to the Association Of British Insurers (ABI). This is a far higher price than they may ever have to cough up in the rest of their driving lives. But do all young motorists deserve to be tarred by the boy-racer brush?
Some in the insurance industry believe the one-policy-fits-all approach is unfair on the majority and does little to encourage safer driving.
This month is the second anniversary of The Co-operative's Young Driver insurance scheme which uses data from a car's "black box" to offer the incentive of lower premium costs to moderate driving behaviour. "This product treats the drivers as individuals and lets them prove they are safe behind the wheel and rewards them for it," says Amy Kilmartin, the project manager of the scheme.
The Co-operative was the first mainstream insurer to launch a black-box product and created the scheme as it wanted to help young drivers with their insurance costs, as well as address the high accident rates among the age group.
Data from the box is sent to the insurer and the driver through an "online dashboard" and a scoring system is applied to the driving style. "We assess driving performance based on four criteria," says Ms Kilmartin. "Speed, braking and acceleration, cornering and the time of day the driving is taking place."
Driving performance is assessed every quarter and young drivers receive an immediate reduction on their monthly premium – or cash back if they have paid in full – if they are judged to have been safe behind the wheel.
Zoë Freeborn, 19, from Reading, has been using the Co-op's scheme since its launch two years ago. Despite initially finding the black box "like a spy in the car", she quickly got used to it and found the arrangement appealed to her competitive side.
"People think that young people are competitive behind the wheel, and I am," she admits. "But, I compete with myself to be safer. When I see the data on my driving I want to perform better each time."
She is about to renew her insurance for the second time. Her premium has fallen from almost £900 two years ago, to a renewal price of £400.
"Having the box means you don't think twice about being a safe driver; you quickly get into the rhythm," she says.
In return for having a box fitted, the policy comes with an initial saving of 25 per cent, compared to traditional insurance, with an average premium of £1,345. Drivers can then earn a further 20 per cent discount through the year if they score well in each quarter, with an average renewal price of around £800.
Since its launch, more than 30,000 young drivers have signed up to the scheme and the Co-op claims it has given around £188 to the average driver in cash-back over that period. Its data also shows accident rates are a fifth lower compared with young customers on its standard insurance, with incidents being less serious and the cost of claims halved.
Research from the British Insurance Brokers' Association says sales of black-box motor insurance products increased five-fold between 2010 and 2012 and predicts there could be 500,000 policyholders by next year.
Ingenie has been offering its version for more than a year and estimates it will sign up another 25-30,000 young drivers this year.
The company was founded by Richard Lloyd, who said: "We approached this from a technology-first perspective, developing the box and then becoming an insurer."
The product also offers discounts, as well as reductions of up to 10 per cent over the duration of the policy for good-driving behaviour and favourable renewal rates.
Mr Lloyd says 70 per cent of its drivers have received a good-driving discount.
So is a black box in every young driver's car the answer?
The ABI thinks not. It is campaigning for more radical changes to improve safety, including: a minimum one-year learning period for young drivers; limiting the number of passengers; a curfew on night driving and zero tolerance on alcohol. Changes it believes will reduce insurance costs by up to 20 per cent.
In response, the Government has launched a consultation to overhaul young-driver rules in a bid to improve safety and cut insurance costs.
- 1 Cyclist in Russia narrowly misses being hit by car and lorry
- 2 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 3 What are your fingerprint words?
- 4 Gary Lineker involved in Twitter row after presenter rubbishes claims he will be warned by BBC over foul-mouthed tweets
- 5 Pink Floyd new album: Band unveil cover art for first record in 20 years
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
Labour Party conference: Ed Balls to set out plan to freeze child benefit to balance books
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Day In a Page
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green