What is telematics?
Telematics is a clever insurance option that can save drivers money on their premium.
What’s not clever is its name, which is a lazy combination of the words Telecommunications and Informatics.
As that suggests, telematics collects information and then communicates with your insurer. Your insurer then determines how much you pay for your car insurance based on the information it collects.
Telematics insurance is also known as black box insurance (because of the small reporting computer) or driver monitoring technology, but how does it work?
Step-by-step: How does telematics work?
- A small computer is fitted to your car.
- The computer monitors your driving (things like speed, harsh accelerating, total mileage and time of journey).
- Your insurer receives this data and calculates your insurance premium.
It really is that simple but can save you money because it rewards ‘good’ driving in the eyes of your insurer.
It means that your insurance premium is based on how you drive, rather than how other people drive.
A new 17-year old driver could be the safest driver in the world however that isn’t taken into account on non-telematics policies.
Instead you are charged based on the data available to your insurer.
As a 17-year old, you will be lumped together with other 17-year olds who are statistically more likely to be involved in a crash and make a claim than any other age groups – regardless of how safe a driver you are.
Telematics works out how much you should pay based on how well you drive, rather than how badly others do.
Where is the black box fitted?
Almost as soon as you’ve bought a telematics insurance policy, arrangements will be made to fit the small black box computer in your car.
The black box is about the size of a smart phone and is installed in your car somewhere out of sight.
It’s this little black box computer that records how well you drive and reports back to your insurer.
When is the black box fitted?
The black box computer is usually fitted within the first two-weeks of your insurance policy starting and the data is used to determine premiums as soon as the black box is installed.
Most insurers aim to fit the black box on working days between 09:00am and 17:00pm, something that needs to be considered when starting your policy.
The costs of a telematics policy are worked out based on how well (or how safe) you drive, and the costs can change.
Obviously to do that you need a black box installed in your car and it also takes some time to get data to determine your costs.
As a result, you will have to pay an upfront cost, which covers the installation, price of the black box and initial insurance cover.
Who benefits from telematics insurance?
Telematics insurance can benefit every driver because it means that insurance premiums are based on their driving as opposed to industry statistics, which is how insurance is calculated on standard policies.
Realistically, telematics insurance is more likely to appeal to new and young drivers who are traditionally charged more than anyone else for car insurance.
However it could also help lower premiums for older generations who drive high-powered cars and are therefore perceived to drive faster.
Telematics car insurance is worth checking out on mustard.co.uk because it could save you money when compared to normal policies.