Black box car insurance
Not just for planes anymore, black boxes are a new sensation on the Australian car insurance scene. Also known as telematics or Insurance Box, this new technology means Aussie drivers can buy car insurance policies based on their driving habits - so the safer you drive, the less you pay in premiums.
There aren’t that many black box policies available in Australia yet, but if it sounds like your kind of setup, you can check out the need-to-know details below:
What is black box insurance?
When you take out an ordinary car insurance policy, the insurer has to try to work out what kind of driver you are and, based on that, what the chances of you having an accident and making a claim are. Although they’re pretty good at making an educated guess, there isn’t really a way for them to know for sure how you drive, short of sitting in the passenger seat as you cruise around town.
That’s where black box insurance comes in. The black box is a GPS device that sits in your car (usually under the dashboard) and records how you drive. The insurance company can then get a clear picture of what you’re like behind the wheel and adjust your premium to match. So if you’re a safe driver, you’ll pay less to cover your wheels.
Pretty nifty, right?
What does a black box measure?
The box is designed to measure your driving style over an extended time, to get a really good picture of how you drive.
Unlike a traditional insurance application, which is based solely on things like your age, gender and what kind of car you drive, telematics is also able to measure physical driving habits, such as:
- Speed. Unsurprisingly, speeding is one thing that will label you a risky driver.
- Car mileage. Lower mileage usually means lower premiums.
- Braking. Sudden or hard braking is seen as a red flag.
- Cornering. Turning corners in a gentle, controlled way is best.
- Steering. You should aim to maintain smooth, consistent steering.
- When you drive. Although it doesn’t make you a less skilled driver, driving at night is considered more risky.
Your black box insurance policy will also take into account some of the usual car insurance factors, like where you keep your car when you’re not driving it and what areas you drive in.
Who is it good for?
Are you the kind of driver who would benefit from a black box policy? Well, let’s find out. It might be a good option for you to explore if:
- You’re a safe driver. One of the main ways you’ll benefit from personalised car insurance is if you’re a consistently safe driver. You’ll be rewarded for this good behaviour with lower premiums.
- You’re a young driver. It’s no secret that young drivers can often have trouble finding affordable car insurance, since they're often hit with extra excesses or high premiums. Since your DriveScore is based on your driving habits and not your age, a black box policy can be a great money saver.
The inclusions and exclusions of a black box policy are generally the same as any other policy. Car insurance is designed to help you cover the cost of accidents or other unforeseen events, so things like broken windshields, a total write-off or a stolen car are covered.
On the other hand, things like wear and tear, mechanical failure or age, that are just normal (though regrettable) parts of owning a car, aren’t covered.
How can I save on my insurance by using a black box?
If you’re a safe driver or rarely use your car, chances are you stand to save some money by opting for a black box policy, because your premiums will be determined according to your DriveScore.
When you install the box in your car, it will monitor how you drive, and also give you reports and feedback on your driving and how to improve it. The more you improve your driving, the lower your premium will be.
Once your driving has been consistent for a certain period and the box has all the data it needs, you’ll receive a DriveScore or driver safety score, which the insurer can use to determine what premium it’s appropriate for you to pay. The higher the DriveScore, the lower the premium.
Can I keep my no claims discount?
No - but that’s not necessarily a bad thing.
With a normal car insurance policy, you build up a no claims discount by driving safely and not being involved in accidents over a number of years. One drawback is that with the exception of some policies which come with no claims discount protection, one mishap might mean you lose your discount.
With black box insurance, you won’t get a no claims discount, but you will get a policy based on how you drive. Which means, if you’re a safe driver and aren’t in any accidents, your policy should be less expensive anyway.
What black box car insurance policies are available in Australia?
At the moment, options are very limited for Aussie drivers wanting black box insurance. In fact, there’s currently only one product on the market, and that’s Insurance Box, with policies underwritten by QBE.
Insurance Box owns the telematics system and you essentially lease it from them to install it in your car and get a DriveScore. Once you do, you’ll sometimes uninstall and return the box, because your score - and therefore premium - will be locked in.
How much will it cost me?
Like any insurance policy, you’ll pay a premium for black box insurance. But there’s also a one-off cost to lease the telematics technology itself. Make sure you take into account this extra cost, and compare car insurance quotes from a range of insurers to be sure you’re getting the best deal.
Is my car compatible with black box technology?
Not all cars are able to have a black box installed, mainly because the telematics system works with a GPS. Newer cars, made between 2006 and now, are usually compatible, while some cars made between 2000 and 2005 are.
When you visit the Insurance Box website, you can check if your car is compatible while getting a quote.
Alternatives to black box car insurance
If you’re not sold on the idea of black box insurance, you may be wondering if there are other ways to save on your car insurance. Well, you’ve come to the right place for an answer! Here are some things to consider when shopping for an affordable car insurance policy:
- Discounts - many insurers offer a range of different discounts, from the no claims discount, through to discounts for buying your policy online. You can also find discounts for seniors, bundling discounts, loyalty discounts and discounts for having security systems installed in your car. Make sure you take full advantage of any of these offers to get the best price on your insurance policy.
- Pay-as-you-drive cover - an alternative to black box insurance may be pay-as-you-drive cover. It’s similar to black box insurance, in that it’s based on your driving habits, since you’ll be charged lower premiums if you only drive under a certain number of kilometres in a year. Keep in mind though, these policies don’t take into account things like speed, or braking patterns, so are less personalised than a black box policy would be.
Head over to our car insurance hub to search for competitive car insurance policies.