Telematics boom: Number of policies have more than doubled in three years and drivers no longer need a black box fitted to get cover
- There are now 55 telematics policies available compared to just 25 in 2016
- Motorists with these policies no longer have to have a black box fitted
- We reveal six tips on how to choose a telematics policy to suit you
The amount of telematics policies on the market has more than doubled in the last three years, new data shows.
There are now 55 telematics products available compared to just 25 on offer in 2016, according to Defaqto.
Insurers have released more telematics-based car insurance policies as they begin to target a range of drivers with the technology, not just younger motorists.
Telematics car insurance is where the driver lets their insurer track their driving through an app or by having a black box fitted in their vehicle.
Increase: The number of telematic insurance policies has over doubled in the last three years
The insurer will then usually offer cheaper insurance for careful driving as the policyholder is considered a lower risk.
Defaqto – the financial information business – used data from its Matrix database to analyse the policies and find out how many there are currently on the market.
Telematics products were initially targeted at new and younger drivers as they usually pay the highest premiums as they are considered to be the highest risk.
However, older and lower mileage drivers are also in insurers cross-hairs – showing the expansion in the market.
Mike Powell, insight consultant at Defaqto, said: ‘Telematics policies have done a lot of good in encouraging young and new drivers to develop good driving habits.
‘Some policies include online dashboards that allow the driver to review their driving and become better drivers.
‘Most black box policies also include theft tracking devices and accident alert systems, which is a great added bonus.’
Many motorists can now use apps to track driving habits & avoid having a black box installed
You might not need a black box…
Another significant change to the market is that drivers no longer to have the devices fitted to their vehicles.
In 2016, all 25 products available meant policyholders had to have a black box device fitted to their car, which would send data back to the insurer.
However, today, just 29 out of 55 policies require a black box to be installed and the others offer motorists a range of telematics options:
- 29 products use a black box device fitted the car
- 13 products use a plug and drive system where the device is sent to the policyholder to self-install
- 8 products use an app to track driving habits
- 4 products can use a black box or a plug and drive device
- 1 product can use an app or a black box device
Powell added: ‘As with all car insurance, it’s important to get the right cover for the motorist’s needs.
‘Consider the cover that the policy offers, the limits on the cover and any excesses.
‘It’s important to check for any additional charges and installation costs, which can be steep.
‘Telematics policies aren’t right for everyone but if you are a careful driver and are happy to let your insurer track you driving habits, they may be right for you.’
While telematics are increasing in popularity, there are still some problems that need to be ironed out.
For example, there are currently issues with black boxes when customers who have them choose to change insurer.
In many cases, those who opt to change their insurer will have to have their black box removed and another installed, often at a hefty cost.
Also, in some situations where there are multiple drivers using one car, a black box may not be able to tell the difference between who is driving, which can alter the drivers score and giving inaccurate results.
Top tips when choosing a telematic policy
Defaqto have given their tips to help motorists when choosing a telematics policy.
1. Look at the telematics options offered, e.g. black box or mobile app.
2. Look at any set up costs, such as installing the device and any costs for cancelling cover, or having the device removed at the end of your policy cover.
3. If you looking to change your car in the future, check any costs involved as some providers may charge to have a new ‘black box’ fitted.
4. Check to see if your insurance provider includes an online’ dashboard’ which allows you to check your driving score and any potential rewards for careful driving.
5. Check what happens if you need to make a claim.
6. Most importantly, look at the actual insurance cover itself, does it have the right cover for your needs? What are the policy claim limits and any excesses? Defaqto’s Star Ratings can help you determine which policies have more cover.
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