The AA is the latest insurer to launch an insurance policy using black box technology to monitor driving behaviour and then price cover accordingly.
A new scheme from the AA involving a little black box could see car insurance premiums fall for many.
Drivers who sign up to AA Drivesafe will have a black box installed in their car. The box uses satellite technology to monitor behaviour such as braking and acceleration, cornering, speed, and at what time of day the car is driven.
The data is fed back to the AA who will use it to set premiums. The better the driving, the lower the premium.
How does it work?
Once the black box is installed and up and running, drivers with AA Drivesafe can log on to a secure website ‘dashboard' to find out how they are performing under four separate categories: speed, anticipate traffic (i.e. smooth deceleration/braking), follow landscape (cornering), and where and when (types of road and times of day).
Separate reports are provided for overall scores such as monthly mileages, daily mileages, journey lengths and road type usage. Useful alerts can be added such as service intervals, MoT test dates and so forth. In addition, the system offers tips on driving style and alerts to offer advice on improving drivers' scores.
[SPOTLIGHT]The AA says that the majority of drivers will find the system helps to highlight driving styles that could be improved, which in turn may influence premium reductions.
How much can you save?
AA Drivesafe has been launched at a time when young drivers have been facing sharp rises in the cost of car cover. According to the AA's benchmark British Insurance Premium Index, premiums for those aged 17-22 have increased by an average of 39% since April 2010.
The AA says that compared with standard inexperienced driver policies, premium savings of up to £850 could be achieved.
Drivers are quoted an average cost for their annual premium at the start of the policy, which includes the cost of installing the box. But they can reduce the premium in as little as 60 days, provided they drive well. Payments are made by direct debit, so adjustments can take place throughout the year.
However, drivers who exceed speed limits, corner sharply, brake heavily, take frequent risks or drive at night a lot will see their premiums go up.
After 20 December 2012 the European Court of Justice (ECJ) will outlaw use of gender to calculate insurance premiums. In theory this should mean that men, who typically pay higher insurance premiums, will see the cost of insurance fall while women could see premiums rise.
The AA says this change in the law will see telematic insurance technology come into its own, with young and inexperienced drivers standing to benefit the most.
Big brother policies
This type of policy is nothing new. They have been around since 2006 when Norwich Union, now Aviva, launched two policies using black box technology. However, they weren’t a massive success and were withdrawn within two years.
However, since then black box technology has got cheaper while insurance for young drivers has got more expensive so these policies are making a comeback.
Almost a year ago the Co-op launched its Young Driver Initiative which works in a similar way. Drivers pay their premium up front as normal and a smartbox is fitted in the car. The box transmits data from the car via satellite to the insurer.
Other similar policies include Insure The Box and Fair Pay Insurance from Motaquote in conjunction with sat-nav specialists Tom Tom.
What to do next
At the moment you can only apply for AA Drivesafe directly at www.aadrivesafe.com although it will be added to some price comparison sites later this month.
Installation of the Drivesafe box, the cost of which is included in the annual premium, can be carried out at the driver's home or workplace and the system ‘goes live' within 24 hours.
Although the user must have a computer to operate the system and run the ‘dashboard', which provides performance data after a lapse of up to 48 hours, you can also check your progress on the AA smartphone app.
However, even if you’re a young or inexperienced driver, don’t assume AA Drivesafe will be the cheapest option for you. Make sure you shop around and get quotes from other insurers too.
Also, be sure to check out these 25 ways to cut your car insurance.
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