What is a Black Box Auto insurance?

Black box auto insurance, also known as telematics insurance, is a type of insurance policy that uses technology to track and record driving behavior. The goal is to rely on the driver’s insurance premiums and the length of time they drive and the safety (or risk) they carry behind the wheel.

How Black Box technology works
Telematics is based on a combination of communication technologies, including wireless devices such as phones and GPS.

The “black box” is placed in the car or downloaded as a smartphone application. It is connected to a GPS device that measures and records the car speed, location, distance traveled, driving times and time of day. Other factors that may affect the driver’s performance include the brake force of the driver, the speed of the car, and the speed at which the driver can turn.

All of this data is translated into symbols, which can be used by insurance companies to set the price for a driver. The better the line, the lower the amount of money should be.

How insurers use Black Box technology

Car insurance companies use black box technology for a number of purposes. For example, some insurers offer pay-as-you-go insurance (PAYD) or UBI-based usage. With car insurance policy, drivers usually pay a fixed fee based on the number of miles they expect to drive in a given period of time, such as six months. On the other hand, in the PAYD system, the driver only pays for the miles traveled. A black box application or application is how the insurer detects it.

Other insurance companies use basic technology to identify the risks a driver has. They can reimburse motorists with a refund, give them the opportunity to drive another car, or revise the owner’s policy at a lower cost.

These motivations seem to lead to increased acceptance of black box technology by drivers. A 2020 survey by international insurance companies found that only 10% of drivers currently have telematics devices in their cars, but 65% would leave one if it meant getting a discount.

Similarly, a 2020 survey by Arity, a telematics company, found that “about 50 percent of motorists are comfortable and their insurance is paid based on the number of miles they drive. , where they drive and what time of day they drive, as well as driving distracting and running. ” That number is up 12 percent from a similar survey in 2019.

But while technology may mean lower rates for some law enforcement, a driver who has a long commute, working late into the night, or exceeding high speeds may eventually pay the price. higher in forecast black box than using traditional font. Another cause of concern is data privacy, especially the fact that insurance companies will share personal information collected from black box types with third parties such as banks or law enforcement agencies. In a nationwide survey, 62% of drivers said they had confidential information.