As Brits cope with rising petrol prices and leaner budgets, many are turning to cutting-edge devices to trim their transportation and auto costs–and add a new space-age flair to their driving. From sat navs that speed up journeys to mobile phone apps that zero in on free parking or track your fuel consumption and maintenance record, we’re now driving with a full kit of digital accessories. Black box insurance, which tracks and rewards safe driving with lower premiums, is among the most pound-stretching digital add-ons, and drivers are tacking them onto their insurance policies in droves. According to a report from the British Insurance Brokers’ Association (BIBA), use of behaviour-based car insurance telematics surged by more than 116,000 policies–60%–between 2012 and 2013.
Adoption rates are still comparatively low: only one out of 100 vehicles on the road is outfitted with telematics devices. The market, however, is booming. The 296,000 drivers who logged their slow turns and steady acceleration in 2013–and reaped the rewards–were significantly more than the 180,000 who did the year before. That 60% growth since last year continues a stratospheric trend for both black box and smart phone based telematics policies systems. Usage has a staggering 2300% increase since 2009, when only 12,000 drivers had adopted telematics policies.
Then, drivers had few choices providers: only a few insurance companies, including Coverbox and ikube, offered black box policies. Now the field is crowded, and providers from Co-op to Marmalade, AA to Fair Pay are courting drivers by ditching curfews, increasing their rewards, honing their tracking software, and running the entire system through drivers’ smart phones.
Some of last year’s leap can be attributed to the ban on gender-based insurance pricing, which came into effect at the end of 2012. Many female drivers who had previously benefited from assumptions about their gender’s driving habits switched to telematics insurance policies, betting that they were, in fact, safer drivers than their male counterparts. The savings were a huge draw for many, particularly cautious younger drivers, who can save over £1000 with a telematics policy. On average, drivers achieved a 25- 33% discount on their insurance premiums, with some even notching 50% savings.
And telematics growth isn’t hitting a speed bump anytime soon: BIBA predicts sales of telematics and driving behavior rating policies will continue to rocket and project half a million drivers will be hitting the road with a black box or vigilant mobile phone in the passenger seat by 2015.
