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The ABI is currently working on an agreement whereby there is a common data standard for all telematics insurance policies put in place, so drivers know how their driving habits will be measured and recorded, should they choose to take out this type of policy.
At present, there are many questions that remain unanswered – will an insurer have grounds to contact the police about particular driving habits if they feel it is necessary? How will we know our data will not be shared with third parties such as car dealers, employers, and even our spouse? Will we ever be certain that the information recorded in the black box will be kept confidential between us and an insurer?
Trusted Dealers takes a look below at some of the issues surrounding black box insurance and its uncertain future in the motoring world.
No standardised regulations
One of the biggest issues currently surrounding telematics insurance is that it is still in the very early stages. There are no standardised regulations set for how data is recorded and its limits, therefore a telematics customer may currently find it hard to switch insurers. A new insurance company would have the right to refuse the recorded data provided such as speed, location, braking, times of use, because it has been gathered using different methods. This means that reductions for careful driving could be lost and drivers may not reap the same benefits they can using no-claims bonuses on traditional policies.
The Data Protection Act 1998 requires insurance companies to seek the active consent of customers before passing on personal information, but will insurance companies adhere to this law? Certainly customers using telematics insurance will have to succumb to loss of privacy to some degree, and there will be the underlying uncertainty that the information they provide could fall into the wrong hands, for example, the police and government agencies could gain access to personal information the driver does not wish to disclose.
There are many practical matters which customers who choose telematics insurance will come up against. As well as the standard factors such as age and occupation which will still be considered on application, some companies will offer pay-as-you-drive policies that will charge for cover per mile, whilst others may impose night-time or early hours restrictions, with fines for drivers who break the rules. For some young drivers, short distance driving may be suited to their current lifestyle, but for university students and those with jobs which require travel or a commute, it may pose a problem.
Despite telematics being seen as a way to nurture and encourage good driving, drivers who take out this type of insurance may find that their driving habits change over time to suit the regulations of the black box. For example, if a driver needs to brake suddenly to avoid a collision and, instead, they brake softly to appease the black box, there may be dire consequences.
Making the ultimate decision
Drivers will need to make a decision on whether black box car insurance is the right type of policy for them. Aside from the fly-on- the-wall surveillance it offers (which may not appeal to many drivers), there is the over-riding issue of large savings to a premium, something that will appeal to younger drivers in particular, whose insurance costs are currently at an all-time high. Parents of younger drivers may also choose to opt for this insurance, after all, it’s a way of keeping tabs on their child whilst saving them money.