If you've just passed your driving test, it's quite likely you're still recovering from the heart attack you had whilst looking at the price of car insurance. Because you are a new driver, you're seen as a risk to car insurance companies, as you're more likely than most to get into an accident. But what if you know you're a careful driver? Well, telematics might be for you.
Also known as black box insurance, telematics policies mean you pay for an insurance policy that is based on you, not the average driver. Potentially, you could save hundreds of pounds on your insurance, simply by installing a small black box in your car. Here's everything you need to know about telematics:
How does it work?
First of all, a small black box about the size of a pack of cards is fitted to your car, usually beneath the dashboard or bonnet, but it can be placed in any number of places so long as it is out of view. It isn't hidden for purely aesthetic reasons though - the insurance company will want to ensure that no one will find and tamper with the device. Plus, in the unfortunate event your car is stolen, the black box acts as a tracker, so you wouldn't want them to find it either. The installation process tends to take around an hour.
Once it's fitted, you're good to go. It will constantly monitor how and where you drive, measuring how good a driver you are. You'll then be able to view how well you're doing via a web-based platform, which may also give you a driver score and tell you how you can improve it. If you are indeed a good motorist, you will pay less for your insurance! It's as simple as that.
Good drivers are rewarded
Insurance premiums are often so high to account for the small number of poor drivers who speed, don't pay attention and end up in crashes. Whilst it's understandable that car insurance firms want to cover their own backs, it can be frustrating paying for an extortionately high premium when you know you're a careful driver. Telematics allows you to prove your virtuousness.
A number of factors are taken into consideration by your insurer when you take out a telematics policy. Your black box will track your location, how long you've been driving for, how fast you accelerate, whether you brake harshly or gently, and your cornering.
Some policies will restrict when you can drive, particularly if your circumstances mean you fall into a high-risk driver category. For example if you've only just passed your test, you might not be able to drive late at night or during the very early hours of the morning. You won't be uninsured if you do drive at these times, but your driver rating as measured by your black box may be negatively affected - you may even be fined by your insurer. This type of policy isn't ideal if you work night-shifts, so be sure to find a policy that's right for you.
Not just cheaper insurance
Telematics doesn't just save you money on your car insurance, it also offers you a host of other benefits. For example it can help you lower your fuel consumption, show you different routes to take in order to avoid accident hotspots, tell you where the safest places to park are, and, if your car is stolen, the police can track your car, increasing its chance of recovery.
Who can benefit from telematics?
Potentially, anyone who's a careful driver can benefit from telematics. However, anyone who belongs to a high-risk category will probably save the most money. If you're a young driver, inexperienced driver or someone who doesn't drive on a regular basis, you should consider a telematics policy.
Any business with a fleet can benefit too. Telematics can aid your business increase productivity, cut labour costs, control fuel expenses, improve customer service, boost fleet safety and security, reduce operating expenses, lower your environmental impact and curtail unauthorised vehicle use. You will know everything, from when a vehicle is started up and shut down, to its current location and speed, allowing you to have complete control over how your fleet operates.
Eventually, it's possible that all cars in the UK will be installed with telematics technology. By 2017, 44 million Europeans will have a black box fitted in their cars, according to Allied Business Intelligence. It makes sense; telematics saves you money, can help minimise the impact vehicles have on the environment, and encourages people to become better drivers. Plus, you will always have peace of mind that if your car is taken from you, you stand a pretty good chance of getting it back.