Telematics car insurance or black box insurance is a type of car insurance policy that calculates your

premium based on how you drive.

Car insurance can be a confusing topic, especially with the variety of options available in the market. One type of car insurance that has gained popularity in recent years is black box insurance. Although black box insurance policies were initially devised to help young drivers reduce the cost of their insurance premiums, more and more drivers now opt for them to save money too.

In this blog post, we'll take a closer look at the ins and outs of black box insurance, including how it works and the benefits, so you can determine whether it might be a good option.

Step 1: A black box is fitted to your car

When you buy a telematics insurance policy from an insurer, a black box will be fitted to your car. This black box is a small GPS-tracking device that monitors your driving habits. The exact information recorded will depend on the insurer, but you should be told before you take out the policy.

Step 2: Your driving is monitored

You will be told in advance precisely what kind of information your insurer will record when you have a telematics policy. Typically, most insurers monitor the following:

  • What time of day or night you drive
  • What journeys you take
  • Your speed and if you ever exceed the speed limit
  • Your journey duration
  • How you accelerate, brake, and take corners.

From this information, your insurer will give you a score for your driving. You can access this score via an app connected to the policy or your insurance account.


Step 3: You're given a driving score

After each car journey, your insurer will provide you with a driving score. This score is determined by analysing data collected by the black box. This will directly affect how much you pay for your telematics car insurance policy. Drivers with higher scores are typically considered safer drivers and may be eligible for lower insurance premiums. On the other hand, drivers with lower scores may be viewed as riskier and may have to pay higher premiums or have their polices cancelled.

Step 4: You're rewarded for safe driving

Black box insurers can reward you in several ways, including:

  • Discounts - If you have a good track record of safe driving, your insurer may reward you with a discounted premium.
  • Additional savings - Some insurers providers reward their drivers with food and retail vouchers for safe driving.
  • Bonus miles - Typically, black box insurance premiums have a mileage limit, meaning to a policyholder can only drive a certain number of miles during their policy duration. If a policyholder can demonstrate they drive safely consistently, their insurer may reward them with additional mileage at no extra cost.