Black box technology could cut young drivers' insurance premiums

Young drivers who have been paying the price for their reckless reputations on the road for years could soon find their insurance premiums cut thanks to black box technology.

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Though telematics technology, which enables insurers to collect data such as speed and G-forces from cornering and acceleration, is fitted in fewer than 50,000 privately-owned cars at present, more and more insurance companies are expected to launch telematics-based policies in the coming year.

Armed with the knowledge of how safe a driver really is on the road, insurers could slash or increase premiums depending on the data collected.

Co-operative Insurance has already launched their 'tracker' cover for 18- to 25-year-olds - using a Smartbox (fitted by the company) to collect data, each driver is given a rating (one being 'dangerous' and five being 'safe). Reviewing premiums every 90 days, those who score high will be rewarded with up to 15 per cent off their insurance.

On the flipside, those who regularly score one or two see their premiums rise, some by up to 20 per cent. Should a driver be tracked driving fast enough for the courts to ban them, an automatic "red card" is issued, giving the policy-holder nine days to arrange alternative cover.

David Neave, director of general insurance at Co-operative, told the Daily Mail: "We are no longer using assumptions but are basing premiums on the actual behaviour of the individual.

"We think that on average drivers will save more than £300 a year on conventional premiums and that one in 10 could save £1,000."

Specialist young drivers insurance company Young Marmalade launched a similar policy earlier this month. Drivers on its Intelligent Marmalade cover are graded on each journey they make - from a safe green to a dangerous red - and plans to create leagues in which drivers will compete for a monthly prize depending on their scores.

As with Co-operative, reckless drivers will be penalised - those who persist in making "red" journeys will see their insurance costs rise by £200 and continued dangerous driving will result in a cancellation of the policy.

Though critics are concerned that these trackers will enable insurers to deny claims on the basis of the data collected, Co-operative insist that the information will not be abused, though they may use it to challenge potentially fraudulent claims.

With insurance premiums for youngsters at an almost prohibitive level, telematics looks like an ideal way to encourage safe driving as well as cut costs for young drivers.

What do you think? Is telematic technology the way forward for young drivers? Leave a comment in the box below...