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‘Black box’ motor insurance sales soar

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by Jan Harris
‘Black box’ motor insurance sales soar

Sales of telematic, or ‘black-box’, car insurance will reach 500,000 in the next two years, according to the British Insurance Brokers’ Association (Biba).

The trade body for the insurance industry has recorded a five-fold increase in this type of motor insurance in the past two years.

The use of telematic technology is proving popular because it can reduce the cost of motor insurance, especially for young drivers who are often faced with unaffordable quotes.

Biba’s research shows a steady increase in the take-up of telematics policies, from 12,000 in 2009 to 180,000 in the first six months of 2012.

When the technology was launched it was offered mainly by Coverbox and ikube, but a wide range of insurers now offer this option including mainstream insurers such as the Co-op, Swinton, and the AA.

The technology may benefit female drivers when a European ban on using gender to assess risk comes into force later this year.

This is expected to lead to a significant increase in the cost of insurance for female drivers who have previously been considered a lower risk group.

Leighann Forsyth, head of communications at Biba, said: “The dramatic increase in black box technology follows the rising cost of premiums for young drivers, the decreasing cost of technology, and new product availability from insurance brokers.”

However the technology still costs several hundred pounds and this can be prohibitive for some drivers.

The ‘black boxes’, which are usually placed inside a dashboard, assess a driver’s performance by monitoring factors such as speed, acceleration and braking.

Safe driving results in a better score and a lower insurance premium.

Yesterday, Cobra UK launched the first windscreen mounted telematics box in the UK market.

Because it is visible to the driver its presence is expected act as a constant reminder to drive safely.

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News posted: July 12, 2012

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