teen drivers

How telematics insurance can help young drivers

What is telematics also known as Black Box insurance?

Telematics involves a black box being fitted to your vehicle which uses satellite technology to assess speed, braking, acceleration, cornering and the time of day journeys are made. Some telematics or black box insurance policies also operate a curfew with an excess premium charged if the car is used during dangerous night-time hours.

The data is transmitted to the insurance provider by GPS and the company can tell how likely a driver is to make a claim.

Drive IQ, a site which offers a platform of online tools designed to help young drivers, expects that one in four car insurance policies will be telematics based by 2020, while the British Insurance Brokers’ Association (BIBA) suggests that sales of black box insurance policies have increased five-fold in the past two years and are expected to reach 500,000 in the next two years.

Why is this important?

Telematics helps insurers rely on real data rather than proxies in order to price insurance premiums, resulting in more accurate prices and risk calculation. It also helps insurers to reduce claims costs, to enable lower premiums and to fight fraud.

There are also benefits for personal lines and commercial insurance customers through reduced motor insurance premiums, fuel savings, value-added services (such as instant emergency services response and young driver monitoring), as well as through the ability to monitor and improve driver safety.

How can this help young drivers?

Telematics insurance is particularly advantageous for young drivers who may find it difficult to get affordable cover – and in some cases, to get cover at all. This is because insurers calculate policy costs according to statistical risk and many insurers deem young motorists too high a risk based on accident statistics. For example, Association of British Insurers (ABI) shows drivers between 17 and 24 are three times more likely than other road users to be responsible for “catastrophic claims”.

As the technology works by recording driver behaviour, premiums can be more accurately calculated based on the young driver’s individual risk rather than that of their risk group, allowing safer young drivers to pay lower premiums.

With more affordable cover in place, this allows young drivers to build up their valuable no claims bonus as soon as possible which also works towards a more affordable policy for them in the future.

How can A-Plan help?

A-Plan offer Young Driver Telematics Insurance through our relationship with Marmalade Insurance Ltd.

With Marmalade, a black box is fitted to your car which is a simple procedure. Unlike some other companies, however, there are no restrictive curfews or negative night-time driving penalties. Young drivers can drive when and where they want to. Once in place, the technology feeds back information on how safely the young driver is driving by measuring acceleration, braking, cornering and speed. This feedback is available online instantly on every journey through a web based portal which also features handy eLearning modules to help become even safer.

Please speak to our Oxford branch for more information or to obtain a “Quick Quote” by answering just 3 questions. Call them today on 01865 241441