How Much Do Telematics Cut The Cost Of Your Insurance By?

Well Dunn Insurance Blog , Driving Telematics

Telematics is the latest tool to cut down on your insurance costs. It’s especially handy for young drivers who always have to bear high insurance premiums. Telematics or black box works to convey the driving behavior of the driver to the insurance company. If the driver follows a safe driving policy on road and the insurance company gets to know about through telematics report- it will invariably lower the premium. The reduced cost will apply to the driver irrespective of his age. It means young drivers too would be able to enjoy lower premium if they can prove themselves as responsible drivers to insurance company through telematics. Now, the question is how much do telematics cut the cost of your insurance by.

Insurance cost cutting through telematics

There have been various studies on the cost-cutting percentage through the help of telematics. According to reports, if you install telematics in your car, you can save something like 25-50%. At its minimum, telematics can save around 5.5% for drivers under 25 years. In some cases, drivers have even saved up to 70% with telematics.

There are special telematics insurance policies which are applicable for those who are ready to install telematics in their vehicle. As per a renowned insurance company, drivers in 25 year age bracket are able to save something like £517. On the other hand, 72 percent of those within 17-25 age group save over £200 during renewal.

However, when you are asking how much do telematics cut the cost of your insurance by, you should understand that mere installation of telematics won’t reduce your premium. You have to be very particular about a safe and legal driving habit to ensure reduced rates. If you follow reckless driving, the insurance company will automatically charge you higher rate- even when you have black box installed in your car.

How does the telematics work in respect to insurance?

First you should know what a telematics is. In simple words, it is an electronic GPS tracker that works through satellite technology. It is installed in your car and while installed, telematics will record and convey your entire driving behavior to the insurance company. When you take to telematics insurance, the insurance company will itself get the black box installed inside your car by its own technician. The different data collected by telematics are-

  • Time of driving
  • Speed limit
  • Motorway miles
  • Driver’s habit of aggressive braking or accelerating
  • Whether the driver takes breaks during long journeys
  • Total mileage

As the telematics pass these data to your insurance company, it will analyse them to understand your overall driving attitude. The data will also help them to understand whether you are prone to causing accidents. For example, those who mostly drive during daytime are considered lesser prone to accidents and hence enjoy lower premiums. On the other hand, if the telematics record show exceeding speed limit on your driving record, you would have to face higher insurance premium- even when you are above 25 years of age.

Telematics insurance policies

Some telematics insurance policy would generally extend lower premium on mere installation of black box. It’s because it’s considered that when you have telematics in your car- more precisely when you know you are under monitoring- you will get more conscious while driving. When you drive consciously and carefully, you are more likely to drive safe and avoid accidents. This way, your insurance company would receive lesser number of claims. When your insurance provider is confident to receive lesser number of claims from you, he would invariably lower down your insurance rate, regardless of your age.

On the other hand, there are some insurance  companies will review the driver’s driving habits after every 3 months and then adjust the premium rates accordingly. In some cases, the insurance provider would repay a part of the premium price taken if the client’s telematics report shows safe driving history on a consistent basis. As per a leading telematics insurance company, the firm has repaid £7.4 million+ to motorists who have proved to be responsible drivers in the first year.

Those who don’t drive at peak times will receive lower premiums. So, how much do telematics cut the cost of your insurance when you avoid driving during peak hours? According to reports, you will be able to save something like £1,500 annually on your insurance premium here.

Why you should take to telematics box?

For judicious determination of insurance rate

Young drivers are usually burdened with higher insurance premiums. Statistics say drivers under 25 are generally more prone to rash driving and hence are considered high-risk clients by insurance providers. But it would be unfair to attest that all young drivers are rash drivers. It is not impossible to find a responsible driver under the age of 25. But such drivers also have to pay higher premiums given the generic assessment of young drivers.

Telematics insurance ignores such generic assumptions and ensures a judicious ground to determine insurance rate. The policy is simple- if you drive safely, legally and responsibly, you will be rewarded with lower premium. It has got nothing to do with your age. On the other hand, if you are a mature yet irresponsible driver, you might have to pay even more than a young yet safe driver.

Reduces rates of accidents

As mentioned earlier, a driver gets more conscious when he is under telematics monitoring. A conscious driver is more careful and hence less prone to clashes. This way, telematics box reduces risks of accidents on road. According to reports, drivers with telematics in their cars are 20 percent less likely to get involved into accidents. Thus, telematics will not only reduce insurance rates, it will also assure safer roads for everyone.

Just like your telematics insurance company, you too can view your driving history if you have telematics installed in your car. A periodical review of the data will help you to assess your driving behavior and point out the wrong driving attitudes that could be corrected.

Read More


Regular safety checks for your car

With the car crashes on an alarming rise of late, safe driving practices are of urgent need. Now, when a car encounters an accident, the lion’s share of the blame is put on the driver only. Yes, unsafe driving practices greatly abet the staggering number of on-road accidents that we ...

Well Dunn Insurance Blog read more


Microbrewery Insurance – What Does It Cover?

The microbrewery industry is growing at a fast pace of late. That’s definitely an astounding picture for the craft brewery sector but then, with growth you encounter business risk- including possible and unwanted business interruptions from sudden equipment breakdown, product recalls and contamination issues. It calls for an urgent need ...

Well Dunn Insurance Blog , Microbrewery read more


Beginner’s Guide to Motor Trade Insurance

Motor trade insurance is vital if you are into any business that involves vehicles and cars. If you are a car dealer or runs a garage, motor trade insurance is a must for you. More precisely, this particular insurance is a legal requirement when you are professionally involved with anything ...

Well Dunn Insurance Blog , Motor Trade Insurance read more


Perks and pitfalls of fuel cards

Fuel cards are no less than a boon when it comes to getting a fuel recharge for your vehicle. In simple words, the fuel cards are somewhat akin to credit cards but these only work for making payments at the gas stations. These are mostly used by employers who extend ...

Well Dunn Insurance Blog read more


What Will Driverless Cars Mean For Insurance?

  Driverless cars are surely the latest buzz in the UK and international automobile sectors. In simple words, these are robotic cars which run automatically without human operators. GB had its first brush with driverless cars in 2016 and self-driven cars are expected to hit the road within the coming ...

Well Dunn Insurance Blog , Driverless Cars read more


Why would I need motor trade insurance?

“Do I or do I not need to take to motor trade insurance policy?”- most of the motor traders are in this constant dilemma with the insurance scheme and are kind of clueless what benefits they would be getting by opting for the motor trade insurance. The law demands every ...

Well Dunn Insurance Blog , Motor Trade Insurance read more