How does Black Box Insurance Work?

Introduction to the guide

This is a guide to help young drivers decide whether or not black box insurance - also known as telematics insurance - is right for them.

When fitted to a car, black box technology allows insurers like Marmalade to understand your driving performance, meaning we can offer a cheaper premium.

However, if you were to search Google for the most commonly asked questions about black box technology, you’d probably find forum discussions and articles about the Big Brother nature of this type of insurance. Worries about driving curfews, whether telematics will limit the volume of your radio and even if it will monitor your text messages are some of the main ones.

But are you right to be worried? Well, the short answer is no, depending on the provider you choose. For instance, Marmalade don’t implement curfews, limit the number of miles you drive or cap your speed, but other providers might. And this is often what causes confusion – what is true of some policies is not necessarily true of all telematics policies.

In fact, to find out what people really knew about telematics, we sent out a UK-wide YouGov survey stating 6 facts. 5 were false and 1 was true. Only 9% of 18-24 year olds correctly identified the true statement and 13% didn’t know.

This showed us there were clearly a lot of misconceptions about black box insurance. And that’s why we wrote this guide – firstly, to help you separate fact from fiction and secondly, to explain how telematics can help develop some of the UK’s best drivers.

Contents

Why does Marmalade use black box technology?

The unfortunate, and often tragic, truth is that there is a direct correlation between young drivers and car accidents1. That’s why car insurance for young drivers is more expensive.

There are two ways of approaching this. The first is to maintain a high insurance premium, discouraging young drivers from getting onto the road. The second is to enable more young drivers onto the road and help them to become better drivers.

Marmalade choose the second route and they are able to make this happen using black box technology. National Statistics tell us that 1 in 5 young drivers are involved in an accident within 6 months of passing their test. With Marmalade, this falls to 1 in 15, meaning our young drivers are 3 times less likely to be involved in an accident within their first 6 months!*

Did you know, almost 455,000 drivers in the UK now have a black box fitted to their car1

We know that everyone has the potential to be a great driver. And while we know we can’t change the accident statistics overnight, we also know that there are 10s of 1000s of young drivers who have never had any problems out on the road. We like to take an individual view on driving ability rather than trust in the statistics of the majority, and the best way for us to do that is to review and help improve driving style through telematics technology.

How does black box insurance work?

Marmalade uses a discreet black box that's fitted to the battery of your car. The black box transmits driving data to us via a GPS signal. This gives us a more accurate picture of how you drive, allowing us to adapt the cost of car insurance to your particular driving style. Stick to speed limits and the rules of the road and you’ll be rewarded with lower premiums at renewal.

What does a black box measure?

Don't worry, having a black box fitted doesn't mean we’ll be scrutinising every second of your driving.

The telematics device in your car only ever alerts us when someone is driving at risk - this is what we call a "red journey".

  • Acceleration
  • Braking
  • Average Speed

We don't take into account any journeys that are less than two miles, because these don’t give an accurate portrayal of risk.

Can I view my driving data?

Yes. In fact, there’s a good chance you’ll spend far longer checking out your driving data than we will. Your data is only flagged to us if you’re driving dangerously, but you can check out your own driving stats any time.

You’ll receive a login that lets you view your account online or on our app, where you can take a look at all the acceleration, braking, and speed info your black box has collected. You can track how you’ve been driving according to our simple red, amber and green flagging system, giving you total transparency.

It's a great way to get an accurate insight into the way you drive, where you can improve, and where you’re doing really well.

Black box myth-busters

As mentioned in the introduction, we carried out a YouGov survey to find out what British drivers really think is true of telematics car insurance.

Drivers were asked two questions. The first of these was “what would put you off using black box technology?” where respondents were able to select from a list of options.

The second question presented 6 statements about all telematics insurance policies, where 5 were false and only 1 was true:

  1. There are curfews which prevent you driving after a certain time
  2. Drivers will be penalised if they go over the agreed annual mileage
  3. Driving mistakes will lead to increased premiums
  4. Police can gain access to driving data upon request
  5. For young drivers (aged 17-24), parents are able to view driving data upon request
  6. Speeding is reported to the authorities

Only 12% of the population were able to correctly identify the correct answer. The figure was even smaller among young drivers (18-24 year olds) at just 9%.

Scroll down to see whether people were right to be put off using black box technology - as well as which of the above statements was actually true.

The truth about curfews

STATEMENT

    There are curfews which prevent you driving after a certain time

TRUE OR FALSE?

    False

This was one of the biggest black box insurance myths that our survey revealed. Not only did 17% of 18-24 year olds think this was the true statement, 37% of 18-24 year olds would be put off using telematics if it meant limiting when and for how long they could drive.

So if some providers insist on curfews, how come Marmalade don’t?

While some insurers impose curfews (as they see it as a riskier time to drive) Marmalade champions young drivers and won’t restrict your driving hours. Lots of young drivers want to work or socialise late in the evening, and, of course, the whole point of driving is to gain independence.

We believe that allowing young people to drive when they want allows them to develop their driving skills at all times of day and night. In fact, there could be a higher risk of an accident if a young driver is rushing to get home before their curfew. At the end of the day, we trust young drivers to drive safely.

The truth about mileage restrictions

STATEMENT

    Drivers will be penalised if they go over the agreed annual mileage

TRUE OR FALSE?

    False

Yes, this one was false too. 12% thought this was the correct statement about telematics insurance.

So what does happen if I go over the agreed annual mileage?

With Marmalade's New Driver Insurance (your car), there isn’t a cap imposed on how many miles you can do each year, so there aren’t any penalties to worry about. Who knows where life will take you? Commuting, road trips, just driving locally – wherever you want to drive, we’re here to help, not impose constraints.

When you’re filling in insurance forms for any insurance company, just be honest about your mileage. This helps us insurers make sure you’re properly protected and that you receive the best quote for you. Misleading insurers about your mileage can affect any claims that you make.

The truth about driving mistakes

Statement

    Driving mistakes will lead to increased premiums

TRUE OR FALSE?

    False – genuine driving mistakes will not lead to increased premiums. There would only be an increase if the mistakes happened repeatedly.

This was clearly the greatest concern for young drivers. While 31% of British drivers thought this was the true statement, a whopping 42% of 18-24 year old licence holders selected this. What’s more, when asked what would put young drivers off getting telematics insurance, 49% said increased premiums from genuine mistakes.

OK, so I won’t get penalised. So what does happens when I make a mistake?

Our black box measures acceleration, braking, and average speed. If there are a number of points in the journey where you have driven “at risk” then it will flag as a red journey. Here’s what happens next:

The first time this happens you’ll receive a call from the Marmalade team within 24 hours to talk you through the journey. We’ll have a chat about what went wrong, and give you tips to improve and avoid more red journeys in future. You’d then enter our caution and premium increase process, which you can read about in full here.

With our New Driver Insurance (your car), for a premium increase to happen, you’d have to have 3 red journeys. On our Named Young Driver Insurance, there is no premium increase, but you can read the caution process we follow here.

At the end of the day, we know that mistakes happen. We’re not here to punish you – we’re here to encourage drivers to be self-aware and to drive more safely. It’s only drivers who repeatedly drive at risk that will incur a premium increase.

And what about a genuinely one off incident on an otherwise good journey?

Our telematics devices are smart. If a single mistake happens or you have a genuine reason to brake suddenly, it won’t trigger a red journey. There have to be multiple points in a journey when the driver has driven at risk for a red journey to be flagged, so a single hiccup won’t matter – we understand, and our technology understands, that these things happen.

Also, for any premium increase to occur, a driver has to rack up multiple red journeys within a given period. Premium increases only happen when drivers repeatedly drive at risk – and less than 1 in 10 of our drivers are asked to pay a premium increase, so it really is just the rare few.

You can read our caution and premium increase page, for New Driver Insurance (your car) to find out what happens when you have a red journey.

The truth about contacting the police

Statement

    Police can gain access to driving data upon request

TRUE OR FALSE?

    True

Ok, so this was the one true statement that only 9% of young drivers got right.

So, why would my data get shared with the police?

The police can request driving data if they have a reason to investigate a driver. By law, we have to work with the authorities to provide the relevant information.

How often has this happened?

We have had less than a handful of requests in the last 6 months, so this kind of request is very, very rare.

The truth about informing parents

    Parents are able to view driving data upon request

TRUE OR FALSE?

    Half true

Only 7% of 18-24 year olds selected this statement, the second lowest of the 6 statements.

What happens if parents request driving data?

This is a slight curveball as technically, parents could see the data if they are a named driver on the young driver’s policy as they would have access to the portal to review journeys made in their car.

Due to data protection, any parent or guardian not named on the policy will not be able to request this data.

The truth about speeding

    Speeding is reported to the authorities

TRUE OR FALSE?

    False

You all got this one pretty spot on, with just 1% of 18-24 year olds thinking that this was the true statement. Having said that, 16% of you said this would put you off telematics technology. So here’s why that wouldn’t happen:

What happens if I speed?

Our black box measures your average speed, so how long and how often you speed on a particular journey is taken into account, as we understand there will be occasions you need to overtake, for example. Excessive speeding would result in a “red” journey. Speeding is not reported to the authorities as part of business as usual.

What our black box users say

19 year-old David Aniculaesei, from Birmingham

“I feel I’m a good and safe driver so I’m looking forward to checking in on my journeys and ensuring I’m constantly improving my skills. I drive to visit my family in Berkshire a lot and drive to see Bethany, my girlfriend, so not having a curfew and a limitless mileage policy is ideal for me.”

Nigel Banks – father to Emily Banks, aged 18, from Scarborough

“When we renewed Emily’s insurance I was amazed to discover we saved a massive 65% after just one year which was simply astounding.” “I cannot recommend Marmalade enough and it has enabled Emily to start her driving career with the confidence that we know she's well insured and that, as her driving skills improve, she will be rewarded as a safe driver.”

Emily Banks - Nigel’s daughter

“In my second year with Marmalade I saved over 66% on my car insurance from the first year due to my good driving score over the previous year. This was a great saving and all other companies that I checked were not even comparable to the price that I now pay for my insurance. Having the black box installed in my car also helps me to be a safe driver but also allows me to have so much freedom. It’s brilliant! I’m sure I will be staying with Marmalade for years to come and would recommend them to any new drivers.”

Black box insurance quotes

As a general rule, insurers view younger drivers as being the riskiest drivers of all, and price quotes accordingly:

Higher risk = higher premium

The development of the black box for cars has revolutionised the way insurers assess risk and offer quotes. Now we can assess your risk based on your actual driving habits, rather than looking at the driving habits of young drivers overall – that’s why younger drivers normally find that a black box policy is cheaper than a standard policy.

We know that most young drivers drive safely – and now you don’t have to let the bad driving habits of some push up the price of your own premium.

See how much you can save getting insured with black box technology - Get a quote today.