Tuesday, 6 November 2012

the little black box

For a while, some insurance companies have been encouraging teenagers to get a little black box in their cars. But how do they work, and will everyone soon have one?

For many young people, getting their first wheels is a rite of passage, a path to independence, the precursor to flying the nest.

But with one in five young drivers having an accident within their first 12 months of being on the road, insurance premiums are high. Many look to ways to reduce their costs.

It has led to the rise of what is known as the little black box, which motorists are installing in their cars to prove they are a good driver, in the hope they see insurance costs drop.

The British Insurers Brokers' Association (Biba) says sales of motor insurance policies which use "black box" technology, called telematics, have increased fivefold over the past two years.
It says it can knock 25% to 30% off policies, saving some young drivers up to £1,000.
Young driver stats
  • One in eight UK licence holders aged 25 or under
  • One in three road death victims are under 25
  • An 18-year-old driver is more than three times as likely to crash than a 48-year-old
  • More than one in four motor-related injury claims of over £500,000 involve under 25s
Source: Association of British Insurers (ABI)

Critics say they cost too much and civil liberty campaigners have expressed concern about the potential for invasion of privacy, or data incriminating drivers.

So how does telematics technology work, and what do these black boxes record?

Typically the boxes are placed inside a dashboard and are able to monitor things such as speed, acceleration and braking, and the times of the day that the cars are on the roads.

The safer the driver, the better the score and the lower the insurance premium.

But prices can go up as well as down. If the analysed information shows examples of poor driving, such as fast cornering or doing wheelies, the black box will also pick that up.

Nick Moger, one of the founders of Young Marmalade, which offers a young driver insurance scheme with telematics technology, says his company uses a green-orange-red system to monitor driving, emailing drivers to alert them when they have picked up bad driving.

"The very first time, they get an email to say they are driving erratically, if they ignore that then they get another email to say you are on probation for 30 days and if they continue to drive badly we increase the premium by £250," he says.

Manufacturers are convinced highlighting poor driving patterns can improve driving behaviour and reduce the number of accidents.

"It has been proved in Italy - where they are probably the leaders in Europe in accident rates - their rate has dropped by 16% by having black boxes," says Moger.

More than 600,000 cars in Italy are believed to have the devices, many more than in the UK. But Biba expects 500,000 UK cars to have them by July 2014.

Nicole Darbyshire, a 20-year-old nursery nurse from Bolton, has already signed up to the system.
After passing her driving test in April, she says the cost of a car and its associated insurance was "a big worry" before she discovered that telematics could help reduce bills.

"For the first month, I was really aware of the box, and if I accidentally sped, I'd brake really quickly. Now I tend to forget it's there.

"I can log onto my account online and see how I am driving. It shows when I've over-accelerated - it has pictures of the street which is a bit strange. So far I've been 97% green, so that's good. I've got more relaxed about checking now as I know it will email me if I do anything wrong," she says.

So might everyone soon have a little black box, or something similar, in their car?
Horrell says it is often parents that are particularly attracted to devices such as little black boxes. But he thinks it is unlikely that everyone will subscribe to such surveillance.

"If people are willing to submit to this kind of observation, they are probably the kind of people who are willing to behave more responsibly."

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