By Clare Yates
8 min read
If you’re looking for ways to cut the cost of car insurance, especially as a young or new driver, you’ve probably heard of telematics, also known as black box car insurance. But what exactly is it, how does it work, and is it really worth it?
Whether you’re a new driver or simply want fairer, data-based premiums, we’ll walk you through how it all works.
What is telematics?
Telematics is a clever bit of technology that helps insurers understand how safely you drive. Instead of relying on traditional car insurance factors like your age, postcode and car type, it uses real data from your driving habits to decide how much you should pay for cover.
In other words, it’s car insurance that’s based on how you drive, not who you are. Drive well, and you could save money. According to Hastings Direct, telematics policies are around 20% cheaper than standard new driver cover on average.
This type of insurance is particularly popular with younger or less experienced drivers who tend to face higher premiums. But older, more experienced drivers can use it too, especially if they want a policy that rewards careful driving or helps them monitor their driving style.
Telematics car insurance goes by a few different names, including:
Black box car insurance.
Smartbox insurance.
GPS car insurance.
App-based insurance.
They all mean roughly the same thing: a system that tracks and scores your driving performance.
How does telematics work?
When you take out a telematics policy, your insurer fits a small device in your car or asks you to download an app that tracks your driving through your smartphone.
The technology uses GPS signals and motion sensors to collect information about your journeys. It measures things like your speed, how hard you brake and how smoothly you take corners. Some systems even record when you drive, as late-night driving is considered a higher risk.
There are a few main types of telematics systems:
Black box: A small device fitted discreetly in your car, often under the dashboard.
Plug-in device: Connects to your car’s onboard diagnostic port (OBD).
Smartphone app: Uses your phone’s sensors and GPS to monitor your driving.
Bluetooth tag: A compact pod that attaches to your windscreen and connects to an app for live feedback on your driving.
Once set up, the data is sent securely to your insurer, who analyses your driving behaviour. Insurers also often let you check your driving performance through an online portal or app, so you can see how you’re doing and where you might improve.
What does telematics measure?
While every insurer’s system works slightly differently, telematics devices look at similar factors. These typically include:
Speed: How often you stick to speed limits
Acceleration: Whether you accelerate gently or sharply
Braking: How smoothly and safely you stop the car
Cornering: How steadily you take bends and turns
Time of day: Whether you often drive late at night or in rush hour
Mileage: How many miles you drive overall
Phone use: Telematics can also detect if you’re using your phone while driving
Each journey you take contributes to an overall driving score. The higher your score, the better your driving is considered to be. Safe, steady driving usually means lower renewal prices or even discounts during the policy term.
Can I get telematics car insurance?
Eligibility criteria for telematics car insurance varies from one insurer to another. But to give you an idea of what kind of criteria is out there, here’s an example based on one leading black box insurance provider:
Driver age and experience: Available to drivers aged 17 to 21 who’ve held a full UK licence for less than two years. Also accepts drivers aged 22 to 71 who’ve held their licence for between two and eight years.
Car value: The car’s market value needs to fall between £500 and £45,000.
Annual mileage: Coverage for between 1,000 to 18,000 miles a year.
Type of use: Covers social, commuting and some forms of business use.
Number of drivers: Allows up to three named drivers, including the main policyholder.
The above specifics can and do differ depending on the insurer, so do check the terms carefully before applying.
Key benefits of telematics car insurance
Telematics insurance can offer a range of perks beyond just potential savings. Here are a few of the main advantages:
Fairer pricing: Your premium is based on how you drive, not just your age or postcode.
Potential discounts: Safe driving can lead to lower premiums or cashback rewards.
Driving feedback: The app or dashboard helps you identify habits to improve.
Theft tracking: Some black boxes have GPS tracking that can help recover your car if it’s stolen.
Confidence boost: Seeing your score improve can make you more confident behind the wheel.
It’s also a good way for new drivers to build a positive record early on, helping them get cheaper quotes in future years.
Facts about black box insurance busted
There are plenty of myths about what you can and can’t do with a black box policy. Here are some facts to put the record straight:
Drive where you need to: You’re free to take any roads your license permits, whether it’s a quick commute or a weekend adventure.
Crank up your favourite song: As long as you stay focused on the road, you can enjoy your music at any volume while driving.
Take your friends along for the ride: Travel safely with passengers within your car’s legal capacity.
Bring passengers of any age: Kids, family or friends can ride along, just make sure they’re covered by your policy.
Drive at night: With responsible driving, night journeys are possible and monitored to reward safe habits. Just remember, regularly driving at night may negatively affect your driving score as it is statistically riskier.
Black box insurance is designed to support safe, confident driving so you can enjoy your journeys while getting the most out of your policy. Check the small print of each policy to ensure there are no restrictions or limits that would be an inconvenience for you.
Can someone else drive your car with a black box?
Yes, as long as they’re insured to drive your car. The telematics system won’t usually know who’s behind the wheel, so anyone driving your car will affect your overall score.
If the other person is a named driver on your policy, your insurer might ask them to register with the telematics app too. That way, their driving behaviour is also monitored and included fairly in your score.
It’s worth remembering that if a friend or family member drives recklessly while using your car, it could bring your score down and potentially affect your premium. So, make sure anyone borrowing your car understands that it’s being monitored.
Phone use with black box car insurance
Many drivers aren’t aware that telematics policies can monitor phone use while driving. If you want to use your phone for sat nav, make sure you set the route before starting your journey.
Touching your phone while driving can count as distracted driving and affect your score, though using your phone hands-free for navigation or music is likely to be fine. Check your policy for your insurer’s take on this to be sure.
Did you know? Awareness of phone monitoring is low. A survey of 2,000 UK drivers by Hastings Direct found that only 15% realised telematics can track phone use. Keeping phones out of use for the entire journey helps you stay focused on the road, maintain an accurate driving score, and avoid unnecessary penalties.
What happens if your driving score isn’t great?
Don’t panic if your first few journeys don’t go perfectly. Telematics is designed to encourage safer driving, not punish occasional mistakes.
If your insurer spots repeated risky behaviour, such as harsh braking or speeding, they might get in touch with tips on how to improve. In some cases, consistently poor driving could increase your premium. However, some insurers will only do this after giving you warnings about risky driving.
Telematics apps often show your trips on a map, highlighting where any risky events occurred. That means you can spot problem areas, learn from them and become a better driver over time.
Other ways to cut your car insurance costs
Telematics isn’t the only way to reduce your premium. Here are some other tips that could help you save:
Choose a smaller or lower-rated car: Cars in lower insurance groups are usually cheaper to insure.
Add an experienced named driver: This can sometimes reduce your premium, but make sure you’re honest about who is the main driver, otherwise you risk ‘fronting’ your policy.
Improve security: Parking off street or fitting an alarm can bring costs down.
Increase your voluntary excess: Paying a bit more towards any claim can reduce your overall premium.
Avoid modifications: Customising your car might make it more expensive to insure.
Combining good driving with these practical steps can make a noticeable difference to what you pay each year.
Is telematics right for you?
If you’re a careful driver and don’t mind your driving being tracked, telematics could be a great way to prove it and be rewarded with cheaper insurance. It’s especially useful for younger or newly qualified drivers who want to show insurers they’re sensible behind the wheel.
At its heart, telematics is all about safe, responsible driving. If that sounds like you, the black box might just be your ticket to lower premiums, better habits and greater confidence every time you hit the road.