Telematics Explained

 

Whether you are about to put up your L-plates, have moved to N-plates or are about to buy your first car, insurance cover will be a real hit on your pocket.
Insurance cover can be the most expensive part of driving, this is because historically young drivers had higher than average collision frequency and insurers couldn’t tell the difference between a good driver and a bad driver when they took out a policy. By now, many of you will have heard of telematics or black box insurance policies, but we would like to explain a bit more about telematics and highlight some of the pros and cons of taking out a telematics policy.

TELEMATICS

A small unit is installed in your vehicle which continuously measures speed, geo position,
braking force, rate of acceleration and severity of cornering. The box is usually hidden out of sight behind the glove box. Data is transmitted by a sim card to a central computer where it is
processed and assessment is made as whether the driving behaviour is high, medium or low risk.
All performances can be viewed on a web browser or smartphone. It is worth noting that Insurers
tend to look for trends in your driving behaviour rather than individual driving incidents. An added benefit is if your car is stolen, the blackbox can actually help locate your car. In addition, some systems are so clever that they can actually identify when a vehicle has been involved in a collision, in severe collisions it can alert your insurers who can then contact the emergency services with your exact location.

The availability of telematics or black box insurance policies have grown rapidly in recent years, particularly because insurers can no longer set their rates based on their customer’s gender. This is where drivers, particularly young drivers, are offered an upfront discount or cashback on their car insurance in return for letting the insurance company install a device in your vehicle and monitor how you drive.

This is an excellent way for new drivers to prove they are safe drivers and should be rated on how they drive, not on how the rest of their age group have driven in the past. The simple fact is that safer drivers will be rewarded for better driving and that can only be a good thing. Each insurer will offer different terms for good driving. Some offer large upfront discounts, whilst others give cashback based on quarterly targets being met.

In addition, your premium after the first year of driving could fall dramatically versus a conventional motor insurance policy. However, if you consistently drive badly or dangerously there are consequences. Every insurer will respond differently to high-risk driving behaviour. In some cases, high-risk drivers will simply not be entitled to premium reductions or other non-monetary benefits. Our best tip is to always read the small print to understand exactly what the terms and conditions state. For example, some may exclude night-time driving or restrict your annual mileage allowance. Like any insurance the best way to get the right cover and the right price, you need to shop around to get the best deal.