Is black box technology being adopted?
Over one in five young men aged between 18 and 24 have installed black box technology in their vehicles, compared to only 14% of women the same age.
Telematics, also known as ’black box’ technology, monitors how well one drives, allowing insurers to offer a more accurate insurance premium. It’s non-obtrusive, usually just a small box – generally the size of a smartphone, that is installed beneath the dashboard of the vehicle. This technology is particularly popular amongst younger drivers - who are often penalised due to their age and driving experience - to prove that they can drive well. It is also sometimes installed in company cars by fleet managers wishing to cut motoring costs. The box can also help reduce insurance fraud by monitoring the weight of the vehicle. One type of fraud is to cause intentional accidents (such as stopping suddenly for no reason), and then claiming that there were several people present in the car, all now suffering from whiplash. With black box technology this would be much more difficult to do, as the telematics technology would be able to give insight into how much the car weighed at that time.
Black Box Technology
Two thirds of motorists believe that the technology won’t meet the wider market, although there has been a slight increase in the number of people who have telematics policies, rising 9% in 18 months to 323,000 policies sold and 61% of those asked said that they’d consider telematics if it meant that they could pay a lower insurance premium. Ian Hughes, Chief Executive of Consumer Intelligence said “There is still a long way to go for the motor insurance market before there is mainstream adoption of telematics.” 4% of motorists believe that telematics will become redundant as technology advances and there have been concerns that the cost of data sharing is the main reason why telematics lacks appeal to the wider market. For example, a driver might invest more money in the purchase of the black box than they’d save in insurance premiums. In fact, nine out of ten fleets said that they’d not install telematics because of the additional costs incurred. Thus, more needs to be done to ensure that the technology appeals to a wider range of people.
Are you a fleet manager? Tradex can provide commercial fleet insurance, and you do not need telematics installed in your vehicles for us to consider you.