How does black box car insurance work?

When you take out a black box car insurance policy, your insurance provider will arrange for a third party to install the black box device in your vehicle. The device is around the size of a mobile phone – and they’ll usually place it in a discreet location, so you won’t be able to see the device.

When it’s installed and activated your insurer will be able to collect information about your driving habits and use this data to adjust your premiums. If you drive safely and responsibly your insurer will reward you with lower premiums – depending on your insurer, it will either adjust your premiums every month or when you renew your policy after a year.

Black box and other telematics insurance policies give insurance providers a more precise idea of how risky a driver you are, rather than relying on general statistics that don’t always show young or inexperienced drivers in a good light.

Does black box work with any vehicle?

A black box device can normally be fitted onto any type of car, regardless of make or model.

Can the black box be removed?

You can ask your insurance provider to arrange for a technician to visit and remove the black box – it won’t leave any permanent marking on your car.

What are black box insurance rules?

Certain black box insurance providers will have particular rules in place as part of your policy. These can include:

• Curfew times - accidents are more likely to occur late at night or early in the morning, so limiting the amount of driving at these times
reduces the risk

• Mileage limits – the more time you spend driving the more likely you could be involved in an accident

• Driving on busy roads – busy roads are seen as an increased risk to you having an accident

How long do I have to have the black box for?

Black box car insurance policies normally last for 12 months – after which you can renew, or compare prices again to find an improved deal.

What types of black box or telematics devices are there?

There are three types of devices used in this type of insurance:

• Black box – this is where your insurance provider installs a black box (like in planes) in your vehicle, which is then used to track your
driving through GPS

• Plug-and-drive – similar to black box devices, plug-and-drive devices track your driving through GPS but rather than being installed by
your insurance provider, they simply plug into a charging point/cigarette lighter

• Mobile App – mobile applications also track your driving through GPS but don’t require any physical hardware installation and aren’t
offered by all providers

Add a named driver

Instead of parents adding a child to their insurance, it’s better to add the experienced driver to your policy if you’re a new/young driver, as this will demonstrate to the insurer that it won’t just be you using the car, so the price will be reduced.

This is because an experienced driver is a low-risk driver and will make you appear as a lower risk when calculating your premium as it won’t just be you driving the vehicle.

Remember: check the T&Cs of policies when shopping around online for any exceptions/limitations which may impact your decision.

Increase your excess

Excess on an insurance policy is how much you can afford to contribute towards the total cost of repairs your vehicle may need in the event of a claim.

Increasing your excess decreases your premiums because not only will the insurer have to issue less money when it comes to paying for repairs, but because it also increases your credibility as a customer.

By setting a higher excess, it’s almost ensuring that you won’t make any superficial or false claims as you are more likely to be adversely impacted because you would have to pay the excess and see your premiums increase.

Remember to set the excess figure to one you know you can afford because if you can’t afford to pay it, the insurer could refuse to process your insurance claim.

Pay upfront if you can

Did you know that how you pay for your car insurance can also affect the cost of your insurance premium? Insurance companies give customers the option to either pay monthly by direct debit payments or make one upfront payment.

It’s cheaper to do the latter. However, this might not be easy to do, given the premiums are much higher for young and inexperienced drivers.

Monthly payments are more expensive than the flat upfront annual amount because they are similar to finance payments where you receive the full coverage but don’t pay for it all until the final month of your policy.

In the months leading up to the final payment, you will be paying interest, and the interest rate can vary amongst insurance companies. However, monthly payments might be a more manageable way for you to spread out the cost of the premium if you can’t pay for it all in one go.

Decrease your annual mileage

One of the questions your insurance provider will ask when you’re requesting a quote is your expected annual mileage.

The answer will affect your insurance premium because the more miles you drive, the greater the risk that you’re likely to be involved in an accident. So your insurance premium could increase if you set a higher mileage.

While it might be tempting to set a lower mileage when you take out your car insurance, it could result in your insurance being voided if you weren't honest with your answer.

If possible, try to reduce your potential mileage by car sharing to work, walking, cycling or taking public transport for longer journeys.

Use a comparison site

Just like you would shop around to find the best deal to buy a smartphone or SIM-only deal, you should definitely do the same when it comes to finding the most cost-effective car insurance.

The good thing with using sites such as GoCompare.com or Confused.com is that you only have to enter all the required information into their site, and they will retrieve the costs from each of the multiple insurers they work with.

Please note that not all insurers are on comparison sites. Take Direct Line as an example - they pride themselves on not being listed on comparison sites.

When comparing quotes, it’s essential to know that the cheapest deals don’t always necessarily represent the best value for money. You should always check and compare the terms of each policy as some will differ in the extent of cover.

Keep your vehicle safe

Where you keep your car will impact how much you will pay for insurance, and it’s one of the questions asked when you’re requesting a quote.

Insurance providers will want to know whether or not the vehicle is parked safely overnight, and they will ask questions regarding the physical address.

If your address has a garage to store your car, or you can park it on your driveway, you’re much more likely to receive a lower quote compared to if you’re parking your vehicle away from the property or on the street – which is deemed to be a higher risk.

If you have to park your vehicle on the street, the insurer will typically request your postcode so that they can calculate the risk of the area.