General Insurance Article - Black Box Insurance: Myths and misconceptions

Black box or telematics insurance has been around for a while and can help younger drivers in particular get cheaper car insurance, however uptake has been slow in the UK. Now new research reveals why many young people and their parents are still reluctant to take out black box insurance and also some of the myths they believe about how it works.

  1.   Three in ten motorists mistakenly think insurers share data from black box insurance
  3.   One in eight think insurance companies tell the police if you’ve been speeding
  5.   One in three think they are tracked in real time by insurers
  7.   5% think black boxes can record conversations in the car
  9.   Around a third don’t know anything about black box insurance
 Admiral, one of the UK’s leading providers of black box insurance, has come across most misconceptions motorists have about its LittleBox insurance. Now it has surveyed 2,000 UK motorists to find out which of these myths they think are true and which they think are false. Its research suggests a huge number of motorists are misinformed.
 How the data recorded by the black box confuses many motorists, with 12% mistakenly believing it will be passed on to the police to prove a driver had been speeding. Three out of ten (30%) think insurers share the data they record with each other and 17% think data is stored forever, none of which are true in Admiral’s case.
 How and where the black box tracks a driver also led to a lot of confusion among those surveyed. One in ten think Admiral would tell their parents or partner when and where they’ve been driving. While one in three think they will be tracked in real time and that black box insurance is just a way for insurers to see where they are. Both of these are also untrue.
 Among the stranger beliefs people have about the black box are that it drains the battery (believed by 9%), that it can record conversations in the car (believed by 5%) and that it can turn down a stereo (believed by 4%).
 Although some black box policies do impose a curfew and only allow the car to be driven at certain times, this isn’t the case with Admiral LittleBox, although 16% think it is true. 7% also mistakenly believe they can only drive in certain places.
 One of the biggest misconceptions is that the premium will be affected just because the driver swerves or brakes heavily to avoid a collision. More than a quarter (27%) of the people Admiral surveyed believe this is true. In fact the driving score is based on the overall standard of driving over an extended period of time or miles; the score will only be affected if you are repeatedly brake heavily.
 Jo Garcia, head of telematics at Admiral commenting on the research said, “While we can only speak for Admiral LittleBox, none of these misconceptions are true. It’s a shame that so many people believe them, especially if they are stopping them for trying black box insurance.
 “The benefit of black box or telematics policies is that they help insurers price their premium based on how you drive as an individual, not how your peer group drives. Young people, who drive safely can really benefit from the discounts offered and get much cheaper insurance.”
 Admiral also asked young drivers aged 16 and 23 and their parents if they would consider taking out a black box insurance policy for themselves or their son or daughter. While 41% of young people and 44% of parents said they would, 31% of young people and 19% of parents said they wouldn’t. So Admiral asked them why not.
 The main reason both young people and their parents gave for not wanting a black box was they don’t like the idea of being tracked. 83% of young drivers and 35% of parents who were against the idea gave that as a reason. For young drivers the other main reasons were that they don’t like the idea the data is shared with others (39% gave this as a reason) and that they don’t let you drive at night (26%). Neither of which are the case with Admiral LittleBox.
 Jo Garcia, said, “One thing which is clear from our research is that many motorists simply don’t understand how black box or telematics insurance works. Every time we asked people if they thought a statement was true or false around one in three answered ‘don’t know’. I don’t think the amount of misinformation on social media helps this.
 “We’d like to inform people of how this type of insurance works so they feel they have enough information to decide for themselves if it’s something they’d like to try.”
 To help anyone who wants to find out more about how black box insurance works, Admiral has launched Myths Uncovered , an interactive website which answers some of the main questions young drivers have. It explains how Admiral LittleBox works through fun graphics and videos and also gives visitors the chance to post their own questions about black box insurance.

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