New research by comparethemarket has found that drivers are not embracing a telematics policy, which means they are missing out on potential savings of as much as £400 per year. According to the company, telematics car insurance policies can save drivers an average of £482 per year.
A telematics insurance policy is one which tracks your driving usage. The insurance company fits a black box to your car and monitors your driving style. The data is sent to the insurance company and they provide a tailored quote based on the data.
The research shows that only 14% of drivers are likely to choose such a telematics policy. A third of respondents did not know it could lower their premium. As many as 10% had not heard of a telematics policy before.
A barrier to adoption of telematics policies is the inability to move the box between insurance companies. This means it is not possible to switch insurance companies. A third of respondents said they would be more likely to take up such a policy if they were able to transfer the black box between insurance companies. More than half of respondents said they didn’t want to share their driving style data with insurance companies.
In most cases, insurance companies cannot transfer the black box to other providers. A new black box must be installed for every new insurance policy taken out. Furthermore, data from one insurance company cannot be used by a different insurance provider.
A telematics policy may be more suitable for younger drivers
Telematics policies are often used for younger drivers, who tend to pay higher premiums due to their risk profile. Installing a black box enables them to drive at reduced premiums. A telematics policy can save younger drivers as much as £1,000 a year.
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