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Telematics Car Insurance: The Most Frequently Asked Questions

December 22, 2015

Read the most frequently asked questions about telematics car insurance policies, a cover option that is on the rise; see the answers, compare quotes and find the best deal to suit you.

What does telematics car insurance mean?

This type of insurance is relatively new on the market and gaining widespread interest. It works by calculating your premium, using your driving habits and ability as the main base. Telematics car insurance is also referred to as black box insurance, GPS car insurance, smartbox insurance, pay-as-you-drive insurance and usage-based insurance

For more detail about this type of insurance see our beginners’ guide to telematics car insurance.

How does this type of car insurance work?

Your vehicle will have a black box fitted or you can be set up with a mobile phone app. The device will monitor your driving habits and the information it processes will be sent direct to your insurance company. Based on the findings, they can adjust your premium according to the way you drive. They may offer incentives to help lower your premium, whilst encouraging good driving.

What are the things that are monitored?

The items the insurer will look at may vary from company to company. Typical items to consider though are:

  • The time of day you are most often driving
  • The number of passengers you carry
  • The car mileage when driving
  • Driving techniques: taking corners and indication
  • Your speed and braking

What sort of people are most likely to benefit from telematics insurance?

Whilst the policy is open to drivers of any age and experience , younger drivers could particularly benefit as they can obtain a lowered insurance premium. It can also motivate to drive carefully.

Drivers who use their car a lot during peak rush hour times or cover a lot of miles may find it less of an advantage. However, it may be worth comparing the prices of premiums.

For more details about the advantages and disadvantages of telematics insurance read more: pros and cons of telematics.

NB>> Please be aware that your insurance company should seek your permission to share confidential data about your driving with a third party who has no connection with your insurance policy.

What is the size of the black box and where does it go in the car?

The black boxes are very small and unobtrusive; they are commonly about the same dimensions as an ordinary mobile phone and can be placed in a position away from direct sight, according to your vehicle type.

Are there any other benefits?

Yes. A black box can significantly add to your car security as it works in a similar way to a tracker. There is also the motivation that telematics insurance policies give to drive more carefully. You may find your insurance company can give you access to an online portal where you can review your driving habits.

A contact to emergency services may be available, in the event of an accident; claim handling may also be facilitated, whilst objective evidence following a road incident can be viewed and assessed by an independent observer.This helps guard against fraudulent claims.

Is it possible to drive someone else’s car with a telematics policy?

In the same way that other insurance policies work, you will need to be a named driver on the vehicle owner’s policy.

How does it work if the car has a shared driver?

In the case of shared drivers, the insurance company will base their findings on the general pattern of driving behaviour.

Can anyone else view my data?

Any third parties, who are not directly involved in establishing your insurance policy, should not be given access to your data unless your permission has first been sought from your insurers.

Are the police given information about any driving offences?

Only if a Court Order stipulates sharing of your data with the police or any other authorities, will the insurance company divulge information about you held on their data base. In all other cases, insurers will not share your data unless you’ve given your express permission to do so. Under normal circumstances, your data will only be used in the event of an accident or claim, or in the day to day management of your policy.

Which insurance companies offer telematics insurance?

There are several larger and more individual companies that offer telematics insurance; check out the policies for each as individual companies will differ in what they offer.

Has the European Court of Justice gender ruling had any impact?

Yes. The European Court of Justice gender directive has had a major effect on car insurance, which has affected young drivers and female drivers. Those who have found their premiums rising, as a result, might find a pay-as-you-drive policy is the answer to suit their needs and keep premiums down.

For answers to any further questions, see the consumer’s guide produced by The Association of British Insurers (ABI). In addition there is an informative good practice guide available via the car insurance industry.

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