My 18 year old son purchased reasonably priced auto insurance that included the installation of a black box.
He was charged with speeding three times by the box – not by police or speed cameras – and his policy was canceled within seven days.
Since then, he has discovered that in the future, every year when renewing, he will have to check the box indicating that previously his insurance had been canceled, resulting in more expensive premiums.
How long will he have to suffer for his mistakes and does that highlight a potential problem with black box policies?
Monitor: Telematics policies supposed to help young drivers save on insurance
Grace Gausden, This is Money, responds: As a rule, car insurance for young drivers is very expensive, often reaching thousands, due to their inexperience on the roads, the increased likelihood of speeding, having friends in the road. car and a host of other risks.
Therefore, black box insurance, also known as telematics insurance, is one of the most popular policies for young drivers because it can help them save a substantial amount on their premiums.
This involves having a small device installed in your car that will measure your quality of driving. It will monitor how fast you are riding, how far you have traveled, and how hard or smooth your braking is.
If you can prove to your insurer that you are a safe driver, it will likely lower your premiums. Some people like it for this reason, but others will just call it Big Brother in the car.
Unfortunately, in your son’s case, he got caught speeding three times and while it wasn’t overwhelmingly over the limit, his insurer was enough to decide that he didn’t. would offer him more of the protection that would have been in his terms and conditions.
You advised him to accept the decision and simply join another provider.
While you thought there would be an increase in the price, you didn’t know how it would hit the £ 2,000 per year mark.
This is because your son has to admit to all other insurers that he ever had a policy canceled by a provider.
A canceled policy serves as a red flag, and customers may struggle to find a traditional insurance provider to cover them.
It is also common to end up paying a lot more for your premiums.
You haven’t said whether this is the case or not, but many insurers will send warnings to their clients first if they notice that they have stepped up in order to prevent them from doing so in the future.
The cost of auto insurance will increase for drivers whose previous policy has been canceled
This gives them a chance to rectify their behavior and prevent their policy from being canceled.
I understand in these circumstances that it looks like your son had a bad hand. While speeding is certainly dangerous and never recommended, it was a young driver who made mistakes.
Now he fears it will impact him for the rest of his life. There may also be a temptation not to check the box in the future, but doing so could jeopardize a policy.
This is Money spoke to a few major auto insurers to see where they stand on telematics policies.
A spokesperson for the admiral replies: There are many benefits to having a telematics policy, not only can they reduce premiums, but they also provide useful information on how you drive to help you improve.
Our black box type products calculate a personalized driving score based on factors such as where, when and how you drive. Customer score is based on how consistently the vehicle is driven over time, so a sometimes violent event is unlikely to impact the score.
Speed is clearly a major factor in too many road crashes, and something the black box will record. However, we strongly believe in educating drivers and helping them improve.
We understand that some new pilots will make mistakes.
We try to identify repeated behaviors and assess and score based on them rather than a one-time error.
However, constant and excessive speeding would have a negative impact on the overall driving score.
Canceling a policy would only be used in cases where someone has consistently exceeded the speed limit and ignored our alerts.
When someone is part of our Driver Improvement Group for demonstrating overall bad driving and fails to improve their driving performance to an acceptable level during the monitoring period described in the terms and conditions of policy, there is a risk of cancellation.
It is important to say that telematics is not designed to catch people. It is a product that saves customers money by proving that they are not a high risk for their insurer.
It allows insurers to calculate a premium based on how that person drives rather than their peer group.
Speed is not only dangerous but, for those with a telematics policy, it can also be expensive.
Lee Griffin, Founder and CEO of GoCompare, responds: Black box insurance policies, or telematics policies, are often a lifeline for young drivers because they offer affordable insurance premiums to new motorists who have yet to accumulate a no-claims bonus.
If someone has had auto insurance terminated by an insurer – whether it was terminated by telematics or through a traditional insurance policy – they will still need to declare this when looking for insurance.
This is not the same as a driving conviction as speeding can be “passed” after a number of years, a cancellation or denial of coverage will still need to be declared when obtaining a quote.
That said, it’s always worth checking with insurers to provide context for the cancellation, as they may not classify this as “canceled insurance” in the traditional sense.
If they do, there will always be specialist insurers who will quote for drivers who have already had a canceled policy, which is why it is so important to always shop around when renewing.
Michael Lawrence, director of distribution and underwriting for brokers at LV = General Insurance, responds: A telematics policy can be a great initial product for new policyholders.
However, bad driving behavior is a strong indicator for insurance companies because it can highlight the risk of a potential accident.
When an insured has received multiple warnings via a telematics system, it can lead to cancellation of insurance, and insurers take previous cancellations into account when offering a new policy.
Providing full details as to why the cancellation occurred can sometimes help limit any premium increase, but is not guaranteed, and five years is roughly how long this will need to be declared.
An Aviva spokesperson replies: Having your insurance canceled can be life-changing. This is a broad term, which could apply to a number of issues – some more serious than others – ranging from mobile offenses (such as speeding tickets) to fraud.
Insurers will likely want to consider the insurance claim individually if the claimant has ever had insurance canceled so that they can assess the circumstances of the cancellation on their own merits.
Grace Gausden, This is Money, adds: It seems like it might be worth talking to several insurers to explain your situation and see what they can offer you.
While your son is paying more on your premiums now, we hope the costs will go down over time, especially if he can prove he is a safe and competent driver.
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