10th August 2016

Black box insurance – good or bad for taxi premiums

A relatively new aspect of motor insurance, you’ve probably heard about telematics having an effect on premiums. Better known as black box recorders, telematics systems can track your driving style by measuring things like speed, fuel consumption and harshness of braking. Thanks to accurate monitoring of safe and economical driving, black box insurance has become much more common for drivers trying to find a good quote.

But is that really all there is to it? Does the use of telematics offer a definitive, magical solution to cheaper premiums, or is black box insurance more trouble than it’s worth? Well the answer isn’t exactly that simple. Instead, there are various cases for and against, so making the best decision to suit you is more of a judgement call.

The benefits

The types of data captured by a telematics box include acceleration, braking, speed control, swerving, moments of impact and overall driving style to accurately assess your policy price on an ongoing basis. Drivers who opt for black box insurance would therefore be more likely to be quite cautious and less likely to cause accidents.

Telematics are usually associated with young or new drivers as a means of monitoring those who may be likely to make mistakes. However, absolutely anybody can get a box installed, regardless of driving experience. Black boxes send the data in real time to the insurance provider, meaning that safe and careful driving quickly goes rewarded with lower premiums.

Whether a veteran cabbie or an experienced driver starting off in the taxi trade, you could benefit from telematics as a way of keeping down the cost of taxi insurance and offering improved customer service with safe and conscientious driving. Of course, it all depends on your driving style.

The drawbacks

As the technology is fairly new, there is no set standard for different insurers measure data. This can become an issue if you were to switch providers at some point, as previous telematics data might not be taken into account. There have also been concerns over the level of scrutiny and supervision given, affecting insurance premiums on a monthly (or even weekly) basis and potentially causing them to fluctuate.

The effect on driving habits can also have unintended consequences, with drivers not necessarily taking the safest course of action on the road simply to please the technology. If a driver needs to act quickly to avoid a collision, their sudden braking could count against them as far as the box is concerned. This is the main drawback of using a method that relies solely on logical programming as opposed to real-world judgements and reactions.

In the end, there’s no requirement to use telematics and it won’t be imposed on all drivers by a certain time. The use of black box insurance isn’t particularly widespread among taxi drivers, but is no less a possibility. The majority of cabbies may continue as normal without it, but if your taxi insurance premiums seem a bit steep, it may be worth considering using telematics for a short time to build up a strong driving reputation.

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