Telematics policy is the answer for young drivers
New research by Compare the Market has found that a ‘black box’ insurance policy, also known as a telematics policy, can bring average savings of £1000 a year for young drivers. The study found that more than 75% of drivers who are under the age of 21 could decrease the cost of their car insurance using a telematics policy but it’s thought that many young drivers remain reluctant to share their driving habits.
What is a Telematics policy?
A telematics policy or black box insurance policy is a unique offering from insurance companies that requires you to have a tracker installed in your vehicle. This tracker, also known as a black box, records, and monitors the quality of the driving. The policies were originally designed for younger drivers who increasingly face rising insurance costs because of their low experience. The black box insurance aims to help those faced with the highest insurance premiums.
The report by Compare the Market shows that telematics quotes are cheaper than standard car insurance for 78% of drivers aged between 17 and 20 years. 69% of those aged between 21 and 24 also could benefit from a black box insurance quote. Looking at the price comparisons for drivers aged 17-20 years, the average saving was £1137 on the cheapest policy. Making it £1811 instead of nearly £3,000 for a year’s insurance.
Despite the evidence that savings can be huge for young drivers, some feel it isn’t the answer. The privacy concerns and general reluctance to share driving information with an insurer are holding some drivers back. A separate survey found that 59% of 17-20 year olds were unlikely to use a telematics policy. The figure increased to 70% of those drivers aged between 21 and 24.
58% of motorists under 21 didn’t actually believe a telematics or black box policy would make their car insurance cheaper.
Read more via Which.co.uk.