A Guide to Black Box Car Insurance

What is Black Box Car Insurance?

You may have heard of Black Box Car Insurance (or ‘Telematics’ insurance) and wondered how it differs from normal car insurance and what the advantages are. In this section we explain what ‘Black Box’ is and how it can help young and first time drivers save money on their insurance.
Why do you need car insurance?

Having car insurance is required by law. But car insurance also provides financial cover for you and your car (dependant on cover level) and others around you.  From insurer to insurer this amount will differ, as will the benefits included and amounts you can claim for each of these.

All car insurance policies are calculated by assessing how much of a risk you are on the road. Insurers use information such as your age, address, driving experience, mileage, type of car, and many other factors to calculate this risk, then offer you a premium based on this.

What makes black box different?

What makes black box different, is that it also takes into account another factor: how you drive. It does this by collecting journey data every time your car is driven, and over time it builds up a picture of your driving style. This driver data is transmitted wirelessly from the little black box and is available for you to view via the Driver App or portal. This gives you the chance to adjust and improve your driving style across the year and if you prove you’re a safer driver, your Insurer can then choose to offer you a discount on the price you pay for your insurance at renewal.

These advantages and more are what we will discuss in this guide.

How does black box work?

Black Box Car Insurance uses a clever type of technology known as telematics. To do this, your insurer will need to install a black box device within your car. This is usually about the size of a matchbox, and is typically installed behind the dashboard and out of sight. In most cases, you won’t be able to see it or know it’s there.

When you drive, the black box uses GPS to send information about your speed, acceleration, braking and cornering to your insurer, who uses it to assess how safely they think you are driving and provide you with a regular Driver Score.

Every time you drive, your Driver Score will change based on the information above. You, as the driver, can then monitor the journeys you make via a mobile app or portal, to see where you may have accelerated too quickly, or braked too sharply. In doing so, you can better understand where improvements to your driving can be made. The more safely you drive, the better your Driver Score and the more likely you are to save on your insurance premium.

It’s worth noting that the black box monitors how the car is driven 24/7 so even if it’s not you who is driving the car, it will count towards your Driver Score - be careful to make any additional drivers aware of this.

How can black box save me money?

As we’ve already discussed, when an insurer calculates how much you have to pay for your car insurance, they take into account many different factors about you and your car. However, they don’t take into account the way you drive.

To give a very basic example, if you’re an 18 year old Admin Assistant and drive a Ford Fiesta in London, insurers will assume you present a similar risk to other 18 year old Admin Assistants who drive Ford Fiestas in London. That means the price you pay will be based on similar risk factors - age, job, car and address - to those people.

What makes black box car insurance fairer, particularly for first time or younger drivers, is that it provides your insurer the opportunity to ‘rate’ your driving based on your driving alone. By monitoring and changing your own driving to make it safer, you can prove that you’re a better risk for your insurer, and therefore deserving of a discount on the price you pay for your insurance.

At renewal stage, a years’ worth of driving experience will earn you a cheaper premium at renewal, not to mention 1 years’ of No Claims Discount (NCD), which will further reduce the amount you pay for your insurance premium. 

Can I earn No Claims Discount (NCD) with a black box policy?

As with all types of annual car insurance you can earn a year’s NCD by completing the full 12 months of insurance without making a claim on your policy. Your NCD will be applied to your quote at renewal.

I’ve passed my driving test – can I get a black box policy now?

Congratulations - you’ve taken another important step towards becoming a fully-fledged motorist. If you haven’t already, you’ll soon realise being a driver isn’t cheap. Now you’re going to need a maintained, roadworthy car, road tax and insurance.

For the most part, you can choose how much to spend on your car (providing it’s legal, of course), and the road tax you pay will be directly related to your cars model, make and age.

However, as a new driver, it might surprise you just how expensive car insurance can be. For first time drivers, an annual premium of £1,000 or more is not uncommon.

This is where black box car insurance steps in – it’s designed for first time (and younger) drivers, as a means to help them reduce the cost of their insurance by proving to their insurer that they are a safer driver.

Applying for a black box car insurance policy

You’ve passed your test, set your sights on a car, and now you need insurance. In this section we discuss how you apply for a policy and what information you’ll need to do so.

Who can apply for a black box policy?

Anyone who holds a full UK driving licence can apply for a black box car insurance policy.

If you’ve just passed your test, you may want to consider black box car insurance as an option.

If you haven't started to learn to driver, you may wnat to consider a specialist insurance policy that offers cover for learner drivers.

Who is black box suited to?

Any driver who has limited or no driving experience, or no claims discount (NCD), such as new or young drivers. This can also include people who learn to drive a bit later on in life, or those who have always been a named driver on a policy but never earned their own NCD. 

How do I apply for a black box policy?

You can apply for a black box car insurance policy in the same way you apply for a normal car insurance policy – by phone or online. Just find an insurer who provides black box car insurance - such as the RAC - enter a few details about yourself and your car, and you’ll be able to get a quote.

To apply you’ll also need information such as: 

  • Your full UK/provisional driving licence details
  • Your personal details, date of birth, address, etc
  • Details of any claims or convictions you may have
  • An estimation of how many miles you think you’ll drive in the year
  • Your car details, such as make and model, registration number, engine size, and any modifications made

If you plan to add any additional drivers to your policy, you’ll need the above details for them too.

New and younger drivers

With the ever-increasing cost of owning and driving a car, plus the high proportion of accidents that involve newly-qualified or young drivers, the cost of normal car insurance premiums was, until recent years, becoming unaffordable for inexperienced drivers who are considered a ‘higher risk’ by insurers. Black Box Car Insurance is a type of car insurance that offers a more affordable alternative to normal car insurance.

The main benefit of black box car insurance is that it offers inexperienced drivers a more affordable way for them to get behind the wheel of their car in their first few years as motorists. It’s no secret that running a car is expensive – as well as insurance, you have to consider the cost of the car itself, maintenance, MOTs and servicing, car tax and fuel.

What black box does is provide an opportunity for the driver to monitor their own driving style and adjust it based on feedback from their insurer. By doing so, they can help to lower the price of their own premium by proving they are a safer driver and so a lower risk.

How long can I have a black box policy for?

The short answer is that there is no upper limit on how many years you can have a black box car insurance policy, up to the maximum age an insurer will quote you for. Similar to standard car insurance, a Black Box policy lasts for a year and before that year is up, your insurer will contact you will a renewal price. If you're happy with the terms of renewal offered, including the price, you can choose to accept and be covered for a further year.

If you’re a new driver, you’ll probably be eager to get out on the road to get your first year of No Claims Discount (NCD) so you can shop around to reduce your premium. However, there are advantages in continuing to insure your car with a black box policy.

For example, for as long as you have a black box policy, you’ll be monitoring your own driving to become safer – avoiding accidents and speeding fines is the most effective way to lower the price you pay for insurance in the long-term. 

Is there a benefit to having black box insurance for more than one year?

With black box, your insurer will be taking into account your driving style, so as your driving improves with time, so could the discount your insurer offers you at renewal. Your insurer may also send you tips on how to improve your driving, as well as fuel efficiency and wear and tear on your car.

If you are insured with the RAC, you may also be benefiting from our ‘connected RAC breakdown service’, which can detect faults with your engine and advise you of what to do, in advance of them causing you problems or breaking down.

What’s most important though, is that the insurance policy you choose should meet your own cover requirements. 

Fitting a black box

As the name suggests, to enjoy the benefits of black box insurance you’ll need a black box fitted in your car. This is a standard requirement that you cannot avoid if you want this type of insurance. In this section we discuss the box itself and getting it fitted. 

What’s in a black box?

A typical black box will pack in a surprising amount of technology. Usually this will consist of:

  • A GPS chip – the same as is used in mobile phones; for location settings
  • A G-force sensor – to monitor how your car is driven
  • A SIM card – the same as is used in mobile phones; to send driving data to the insurer
  • A back-up battery - in case the box is damaged or your vehicle loses power

Do I have to have a black box fitted?

For "black box" insurance policies, yes you do. So your black box insurer can collect the information they need to monitor your driving style, they need to install a black box device to your car. This will be a condition of all black box car insurance policies.

When do I need to have the black box fitted?

Most insurers will want the box fitted within a certain time from the start of the policy, for example 14 days. The policy terms and conditions allow the insurer to cancel your policy if the box is not installed within a specified time. Often, they’ll install it at a time and place of your choice (such as at college or your place of work), so it’ll be convenient for you.

If you book an appointment then realise you can’t make it, make sure you phone you insurer to rebook an alternative day or time – a missed appointment might incur a charge for the fitter’s time.

How much does it cost to fit a black box?

That depends on the insurer you choose for your policy. Some will charge you a fee for installation of the black box, and some won’t - such as the RAC - so it’s best to check before you purchase.

It’s worth noting that if you take out a policy and then decide you want to cancel it, insurers may charge you a cancellation fee for a) the time you have been covered by the insurance, and b) to cover the cost of their black box. 

What data does a black box collect about me?

Your insurer will typically collect information on things like your speed, acceleration, braking and how you drive around corners or bends. Some insurers may collect further information, such as what time of day you drive, as this may increase your ‘risk’ as a driver if you drive mainly at night or in rush hour traffic, for example.

Does the black box restrict where and when I can drive?

Some insurers may restrict the hours you can drive and your annual mileage, to reduce the risk of you being involved in accident. However, some insurers – such as the RAC - do not place these restrictions on your driving, and instead allow you to choose what mileage you apply to your policy when you get a quote. Make sure you provide a realistic annual mileage though - if you exceed your estimate, this could result in an increase in your premium or potential cancellation of your policy. 

What happens with the data that a black box collects?

The point of black box insurance is not to spy on drivers, but to encourage them to monitor their own driving and adjust it to make it safer for themselves, their family, friends, and other road users. Safer drivers mean safer roads and fewer road deaths.

A black box device is designed to collect data to allow your insurer to assess your driving style and provide you with feedback in the form of a Driver Score and other driving tips. Your black box insurer must tell you in their Terms and Conditions whether information is shared with third parties, and for what reason, but generally, information collected is used to administer your insurance policy.

For example, the RAC allow access by the policyholder and by the policy insurer for administration purposes. The box is not used as a ‘speed camera,’ and driver data is not shared with anyone else, such as parents or guardians.

Will the black box tell the police if I speed?

If you drive over the speed limit, your information won’t automatically be passed to the authorities, but your insurer will let you know when you drive unacceptably over the limit and discourage you from doing it again. This will also affect your Driver Score – if you continue to drive over the speed limit, your insurer has the right to cancel your policy. If your driving is excessive, such as doing 100mph in a 60mph zone, your insurer may cancel your poicy immediately.

In extreme cases - for example your car is stolen, or you were involved in an accident - your insurer may be legally obligated to pass the data to the authorities.

What if my car already has a black box or I change my car?

As we’ve already discussed, the black box contains advanced technology that sends driving data to your insurer. So, that means your insurer will need to install their own box in your car in order to provide you with an insurance policy.

If you decide to change your car during your policy, the black box will need to be transferred to your new car, so remember to call your insurer to arrange a fitting appointment. This may incur a charge with some insurers, but it’ll be a condition of your policy - you’ll invalidate your policy if you continue to drive your new car without a black box. 

What are the benefits of black box?

Whether you’ve been driving for a couple of years or you’ve just passed your test, black box could save you money on your insurance, but the advantages don’t stop there! Read on to discover more about the RAC's 'Black Box with connected Breakdown service', new for 2018.

Will I automatically get a discount for using a black box?

Not always. It’s up to the driver to prove they listen to the feedback their insurer gives them and act upon it. Some black box insurers will offer discounts on your premium if your driving is considered to be safer, or increase your premium if you are considered more of a risk on the road. In extreme cases, they can also cancel your policy if your driving is considered too dangerous, but overall, if you’re a careful driver, you have nothing to worry about.

Are there any additional benefits?

When a black box device is installed in your car, it uses GPS to send driving information to your insurer. This also means that if your car is stolen, your insurer can use the data to help locate your car for you.

In conjunction with your Driver Score, some insurers can send you helpful tips via mobile app or email on how to improve your driving style. This can include tips on driving more economically, which in turn can help you to save money by reducing wear and tear on your car, and using less fuel – all of this adds up to save you money on the cost of motoring.

Your insurer can also use the black box data to notify you of any issues with your car, such as a problem with your engine, which could later lead to your car breaking down. At the RAC, this comes as standard with our 'connected breakdown service' when you add it to your black box policy. 

What is RAC connected Black Box Car Insurance?

Brand new for 2018, ‘Black Box with connected Breakdown’ is an exciting new insurance proposition from the RAC, the Motorists’ Champion.  

If you choose to add Breakdown cover to your RAC Black Box Car Insurance policy, you’ll automatically get ‘connected Black Box’. This means that using the black box we install in your car as part of your black box insurance policy, we can monitor the health of your car when you start it and give you an early warning of any issues that could lead to a breakdown, for example a faulty engine sensor or a problem with the catalytic converter.

Have a read of our guide on ‘connected Black Box’  to see how it could benefit you.

Is black box insurance for me?

As with any insurance policy, car or otherwise, that’s a question only you can answer. When considering any insurance, you should ensure the cover is suitable for you and your needs – that’s the most important thing.

You should also ensure you read all policy documents to understand what you’re covered for, what your obligations are, and how the insurer uses your information, before purchasing a policy.

You could also talk to parents, friends, colleagues or an insurance broker for advice, or do your own research online. If you are a parent of a young driver, why not take a look at our Advice for Parents article?

See how much you could save with a black box policy - get a quote for RAC Black Box Car Insurance today.