A guide to telematics car insurance

You may have heard of telematics car insurance (or ‘black box’ insurance) and wondered how it differs from normal car insurance and what the advantages are. In this section we explain what ‘telematics’ is and how it could help young and first-time drivers save money on their insurance.

What makes telematics car insurance different? 

What makes telematics car insurance different, is that it also considers 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 gives you the chance to adjust and improve your driving style across the year. At renewal you then pay a price based on how you, as an individual drive, rather than all young drivers. The safer you drive the more you can save.

How does telematics car insurance work?

With telematics car insurance, your insurance provider will install a black box device within your car. When you drive, the black box uses GPS to send information about your speed, acceleration, braking and cornering to your insurance provider, 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 could be made. The more safely you drive, the better your Driver Score and the more likely you are to save on your insurance premium. 

In conjunction with your Driver Score, some insurance providers 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.

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.

What are the benefits of telematics car insurance?

The main benefit of telematics car insurance is that it offers inexperienced drivers a more affordable option for insuring their car. It’s no secret that running a car is expensive – as well as insurance, you must consider the cost of the car itself, maintenance, MOTs and servicing, car tax and fuel.

The benefits of telematics insurance:

  • Drive well and pay less at renewal
  • Track your Driver Score and get driving tips using our Free driver app
  • Use GPS to track your vehicles location if lost or stolen

How does Telematics Insurance reduce the price?

Using telematics technology your insurer monitors your driving style across the year, and as your Driver Score improves with time, so can the discount offered to you at renewal. The safer you drive, the less likely you are to be involved in an incident and the greater you’ll be rewarded by your insurer.

The best way to improve your telematics Driver Score is to really understand how it's calculated and what impacts your score negatively, including your speed, how sharply you brake and accelerate as well as how frequently and when you travel.

I’ve passed my driving test – can I get a telematics 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 plus the relevant 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 telematics car insurance steps in – it’s designed for first time (and younger) drivers to help them reduce the cost of their insurance by proving to their insurance provider that they are a safer driver.

How do I apply for a telematics policy?

You can apply for a telematics car insurance policy in the same way you apply for a normal car insurance policy – online or over the phone. Just find an insurance provider who provides telematics 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.

How long can I have a telematics policy for?

The short answer is that there is no upper limit on how many years you can have a telematics car insurance policy, up to the maximum age an insurance provider will quote you for. Similar to standard car insurance, a telematics policy lasts for a year and before that year is up, your insurance provider will contact you with 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 12-months.

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 telematics 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 telematics insurance for more than one year? 

With telematics, your insurance provider will be taking into account your driving style, so as your driving improves with time, so could the discount your insurance provider offers you at renewal. Your insurance provider may also send you tips on how to improve your driving, as well as fuel efficiency and wear and tear on your car. What’s most important though, is that the insurance policy you choose should meet your own cover requirements. 

Find out more about RAC Black Box Car Insurance and see if you could save.