Telematics-based car insurance is on the rise in the UK, as the number of live telematics policies has increased by 40%, according to research by the British Insurance Brokers’ Association (BIBA).
Designed to promote good driving behaviour, these policies can allow consumers to save up to 25% on car insurance premiums. Young drivers, who may otherwise struggle to find affordable cover, can save upwards of £1,000.
BIBA surveyed 30 of the UK’s leading telematics brands, revealing that there are now almost 455,000 live policies compared to 323,000 in December 2014, a 40% increase.
Most telematics policies use a hard-wired “black box” installed in the vehicle. The device monitors various driving actions such as time of trip, speed, acceleration, cornering, familiarity of route, and braking behaviour. These data are analysed to construct a risk profile, with safer drivers getting larger premium discounts.
Graeme Trudgill, executive director at BIBA, said: “Telematics is becoming the motor insurance solution of choice among young drivers as they can take control of their own premiums by electing to have their driving behaviour monitored. Industry statistics show there is a 40% drop in crash risk when a new driver has a telematics policy. Telematics equipment also helps reduce theft claims, many doubling as vehicle tracker devices.”