Telematic policies are offered by a range of insurers. When insured on a telematic policy you will have your driving recorded by your insurer using GPS technology, which is commonly recorded through a 'black-box' gadget fitted to the vehicle, but can also be done through a smartphone or by the vehicle itself. Your insurance premiums will then be calculated on the data received by your insurer that helps determine how much you pay. Safer drivers can be rewarded whilst unsafe driving habits penalised.
Driving information is considered together with other risk factors like your vehicle and home address to calculate your insurance premiums. With a telematics policy you will be able to view your driving record and driving score. This is a good way to know how your driving is likely to affect your insurance premium. And if you know your insurer is penalising you because you tend to accelerate quickly and break sharply, you are then able to change your driving behaviours in response.
Telematic policies are becoming increasingly popular, especially amongst younger drivers who are forced to pay more their insurance as part of a higher risk group. These policies are also taken out by other high risk groups like convicted motorists or 65+ drivers re-insuring a vehicle.
If you're a 'safe' driver then you are set to benefit from a telematic insurance policy. Take this as an example. Imagine you are an 18 year old male working as a shop assistant in inner city Birmingham. You drive a Toyota Yaris. Your insurance company will see you the same as every other 18 year old shop assistant in Birmingham who drives a Toyota Yaris. You'll pose the same risk and pay the same premium. But with a telematic insurance policy your insurer will be able to 'assess' your driving behaviours and set premiums based on this information also.
Premiums can be adjusted in various ways which will outlined by your insurer in their policy. In some cases how much you pay will be adjusted on an annual or monthly basis. Some insurers will offer non-monetary benefits and others will offer a reduction on the next policy that you take out with them.
Each insurer will assess driving behaviours differently, so read the finer details of your policy so you know what will affect your premiums. Generally though, how you accelerate, brake and corner will all be recorded as these are common driving habits that can indicate how you drive.
Other factors a black box will record is the time of day you travel, how regular you travel, how fast you drive and what routes or roads you take. If you travel during rush hour then you're insurance premium may be affected as these are high risk times of the day for motorists. Likewise, if you drive in high risk areas, like inner cities, then your insurance premium may also be affected. Insurance premiums are calculated as a sum of all relevant factors recorded.
If there is another named driver on your policy then their driving also will be taken into account. Premiums will be calculated based off the driving behaviours of all individuals covered by the policy. There may also be additional charges if you breach any restrictions like mileage or driving hours which have been set by your insurer.
A telematics policy is available for comprehensive, third party fire and theft, and third party only insurance policies. You'll also be able to take out additional extras to your policy like breakdown and courtesy car cover. Purchasing a telematics policy won't limit the insurance options and add-ons offered by the insurer.
You will then be instructed by your insurer to have a 'black-box' gadget fitted to your vehicle, which can be done by a third party, or asked to download an app. Fitting a black-box may incur additional installation fees and also you may be expected to pay any repair and replacements costs too. It will be best to make sure you have your car's V5C or vehicle logbook ready to prove ownership of the vehicle to an installer.
Once the black-box has been fitted it will start recording whilst you drive and your data will be uploaded onto your account with the insurer. If you are concerned about the protection of your data, contact your insurer and enquire about how they handle customer data and driving records.
Premiums will be calculated on on annual or monthly basis and you should be able to access and read the data captured. This can be in the form of an online dashboard or maybe you will have your black-box data sent to you via email. It is common that you will have a 'driving score' recorded by your insurer that will be used to adjust your insurance premiums.
Check with your insurer how they will adjust your premiums and also how they will reward you. Some may offer a discount on the next insurance policy you take out with them, whilst others may adjust your premium on more regular basis.