What is Pay How You Drive insurance?
Pay How You Drive insurance is pretty straightforward. An insurer places a black box in your vehicle which monitors how you drive and rewards you with a cheaper policy if you can prove you’re driving safely.
The box tracks things like how a driver is cornering, breaking and sticking to the speed limits and the data is sent via GPS to your insurance company. It can then see detailed information about you and your driving habits, such as the time of day you’re driving, the type of road you travel on, the distance the car has travelled and how safely, or how poorly, you’re driving.
How much can you save?
This depends on the individual insurer and your own circumstances, but your policy costs will be lower if you stick to things like avoiding driving in rush hour traffic or late at night and generally maintaining a safe level of driving.
Young drivers, especially male drivers, are most likely to have an accident and two out of every five take place during 11pm and 6am, according to BIBA. By encouraging drivers to be off the road during these hours, the risk of an accident is lowered and in turn so are the insurance costs.
Who does it benefit?
Most policies, such as the Co-Operative Young Driver Insurance, are only available for younger drivers.
At the end of this year the European Court judgement will come into place, banning insurance companies taking gender into account when pricing policies. This means premiums should fall for men, who typically pay more as they are deemed a higher risk, and the price for women, especially those aged under 25, will rise. Black box insurance is a way to counterbalance the rise and allows everyone a chance to lower their premiums – if they can prove they’re driving safely.
The rise in sales is due to a host of insurers jumping on the bandwagon and launching products within the black box range, but where do you start and how can you find out which one will save you the most money?
AA Drivesafe
Launched this year, the AA Drivesafe offering promises to save drivers around £850 on their annual policy.
It’s open to everyone, but is best suited to people with high insurance premiums, such as younger or newly qualified drivers. As with most policies, the price of installation of the box is included in your annual premium, and within 60 days this can be reduced depending on your driving habits.
The box works in the same way as others by tracking your driving through a GPS signal. Drivers have access to a dashboard where they can find out exactly how they’re being marked and email alerts can also be set up for important dates, such as your MoT.
Insure the Box
Launched in 2010, drivers save an average of £500 per policy with Insure the Box rising to £821 for first-time motorists. It's a 'Pay as You Drive' scheme - drivers buy a bulk of insurance miles, starting with 6,000, and a small clear box is installed for free behind the dashboard.
Policy holders can earn up to 100 bonus miles per month if they are driving according to the safety rules. If you go over the 6,000 miles, your bonus miles kick in and if you’ve used them all up you need to buy top up blocks – at a cheaper price than the original premium.
At the moment 60,000 people are signed up to Insure the Box, making it one of the biggest types of black box insurer. Although it’s primarily for young drivers, drivers of all ages can apply.
Autosaint
Specially designed for provisional, newly-qualified and young drivers, Autosaint works by charging drivers a low premium, which is around 35% cheaper than your average policy, from the start.This is monitored each quarter and if a driver scores below 60, the premium will be changed. However, if they score 60 or above the rate will stay the same and larger discounts will be offered.
A risk profile is created by monitoring how the car is being driven, and alerts are sent out to warn you if your driving is going to push up your premium.
We looked in-depth at this particular black box in Putting telematics to the test.
The Co-operative young driver insurance
The Co-op product is specifically designed for people aged between 17 and 25 and there are currently 21,000 drivers signed up to the scheme. It was the first major insurer to get into the black box technology market last year and drivers with it have had 20% fewer car crashes than those without.
The average premium for 17 to 22-year-olds with the policy is £1,345 compared to £3,478 to those without, according to the AA British Insurance Premium Index.
Every 90 days data is reviewed from the black box and premium prices are changed accordingly. Those who prove they can stick to the rules of the road will see premiums fall while those driving consistently badly can see their premiums rise by as much as 15% of the initial price.
[SPOTLIGHT]There are also e-mail alerts sent out every 45 days to let the driver know how they’re performing and an online dashboard where you can view your motoring safety stats, along with advice on how to lower your premium.
iKube
Marketed as the longest continuous provider of black box insurance for young drivers in the UK, with the first policy sold back in 2006, iKube is another one specifically for drivers aged between 17 and 25. The telematics box is powered by TomTom technology and it is another 'Pay As You Drive' scheme, where your premium is reduced if you avoid driving after 11pm.
This is a good policy if you’ve not yet passed your driving test as premiums won’t change when you do and around 15,000 people are currently signed up. For older drivers, there’s also a separate policy called ‘Fair Pay Insurance’ which works in the same way. It’s most suitable for those who pay £1,000 or more for their policy and drive fewer than 8,000 miles a year and as both are powered through TomTom you get instant updates while you drive.
Ingenie
Ingenie is another one specifically for young drivers. Data is captured through the black box and sent to the insurer, and is available online or through a mobile app. There are no time curfews or mileage limiations and it simply monitors your driving over a period of time, rather than looking at isolated incideents. The price is reviewed every three months at which point a discount is applied if you’ve maintained a safe driving style.
How else can you save money on your car?
Along with getting the newest technology to help lower costs, there are lots of other things that can help lower your premium and for a full guide check out our article on 25 ways to cut your car insurance.
Are you convinced by black box insurance and is it something you or your child might try out? Whatever your thoughts we would love to hear them in the Comments box below.