Drivers are being urged to take out so-called ‘black box’ car insurance, despite fears that inaccurate readings are actually increasing costs.
Bad reviews of the black box policies have nearly doubled in two years, and more than 70 per cent of feedback in 2018 was negative, according to consumer site Smart Money People.
More than four in five complaints relate to the accuracy of the devices.
In one case, a young driver said his black box had recorded him crossing the English Channel even though he was in the UK at the time.
Must-have gadgets: Black box devices help drivers, especially those who have just passed their tests, get affordable insurance. But bad reviews have nearly doubled in two years
Others have reported receiving bad driving scores while their car has been parked on their driveway.
In the worst cases, the errors have resulted in policies being cancelled, leaving motorists uninsured.
The Financial Ombudsman is also concerned about the issue, warning it has heard from ‘a growing number of people’ that the data collected by their black box is wrong.
More than one million motorists in the UK have a black box policy — or, as it is more formally called, telematics car insurance.
Ordinarily, insurers price car cover premiums based on factors such as your age, postcode and what car you drive.
But, with telematics policies, prices can go up or down depending on driving style, mileage, the routes you tend to take and the time of day you travel.
I was living in an area with lots of potholes and, whenever I drove over them, the black box seemed to think I had been in an accident. I would receive notifications or they would call me up to check I was all right. It was so irritating.
Millie Hewitt – black box driver
Insurers use a black box fitted in your car or a smartphone app to record the information.
Drivers will then receive a notification via email or text message if the insurer wants to alert them about poor driving habits — such as speeding or braking too hard.
Too many of these incidents, or an extremely serious one, can result in premium hikes or the policy being cancelled altogether.
Yet, despite this, young motorists are often willing to have their driving scrutinised, as the policies can be hundreds of pounds cheaper.
In fact, the policies have been so widely praised, increasing numbers of older drivers are applying for the deals, too.
But now, experts are warning some of the technology used by insurers may be flawed.
My premium was hiked by £1,000
Millie Hewitt, 19, received a warning notification about a collision when her car was parked in a garage
When Millie Hewitt passed her driving test at 17, she quickly realised that opting for a telematics policy was the most affordable way to get cover.
So the University of the West of England fine arts student, now 19, insured her £1,000 Suzuki Swift car through Adrian Flux Insurance for £1,200.
The insurer sent her a small black box with instructions on how to stick it to her windscreen.
She also had to download an app on her mobile so that the insurer could notify her about her driving habits.
But she says: ‘I was living in an area with lots of potholes and, whenever I drove over them, the black box seemed to think I had been in an accident.
‘I would receive notifications or they would call me up to check I was all right. It was so irritating.’
It meant that Millie would be interrupted during college lectures. Once, the student even received a warning notification about a collision when her car was parked in a garage.
Her insurer ended up cancelling her policy just one month before it was due to renew, after the black box fell off her windscreen.
She had left it on her dashboard, but the insurer insisted she had to buy a new £30 cradle to put it back on the windscreen.
When she refused, a letter giving her seven days’ notice of the cancellation, and another confirming that the policy had already been cancelled, arrived in the same envelope days later.
Millie was left unable to drive her car (pictured) after her insurer cancelled her policy just one month before it was due to renew, after the black box fell off her windscreen
The cancelled policy remained on Millie’s record and, when she tried to find cover elsewhere, she was quoted up to £8,000. Millie says: ‘I had to go for another telematics policy costing £2,500 as it is so much more expensive not to have a black box.’
An Adrian Flux spokesman says it only called Millie three times and that two further ‘incidents’, which triggered calls, wouldn’t have been recorded if the device had been reattached properly.
The spokesman claims Millie never contacted the company about any inaccuracies and that it cancelled the policy because Millie failed to follow the rules by replacing the cradle and reattaching the device.
He adds: ‘There is no evidence that [the device] is not accurate when used as intended.’
Devices operate in different ways
Part of the problem is that telematics devices operate in different ways. Some are installed within the car itself, usually through a computer that monitors data such as your speed and mileage and is located under the dashboard.
But others use GPS technology, or the same signal as mobile phones.
Bad weather, poor road conditions and a lack of signal can affect their performance.
One couple told the Financial Ombudsman that, two months after taking out a telematics policy with Southern Rock last year, their driving score had dropped so low they were asked to pay an extra £692.
Four months later, the car was involved in an accident and the policy was cancelled. They complained to the firm that the additional premium had been excessive and later went to the Ombudsman.
Southern Rock claimed the black box had recorded ‘three mini crashes’ within a three-hour period on the day of the accident and a total of ‘1,812 impacts’ in the six months the policy had existed.
The Ombudsman ordered Southern Rock to refund the couple the additional premium and pay £100 in compensation.
Its ruling said: ‘The available evidence does raise doubts about the accuracy of the black box.’
Another driver told the Ombudsman that he had raised concerns about his black box soon after taking out a policy with More Than, the trading name of Royal & Sun Alliance (RSA), in July 2017.
The device had merged two sets of journeys into one on at least two separate occasions in July and September 2017, which meant he was recorded as speeding.
RSA accepted the error and replaced the black box. However, the motorist continued to be penalised on several occasions for driving over the speed limit on 20 mph roads.
He used his own dashcam footage to prove he had not even been driving on the roads on which RSA claimed to have recorded the speeds.
The insurer admitted there had been errors and offered him £300 in compensation.
It claimed the first issue was due to a software update and the second was caused by a GPS problem. It insisted that the black box itself had not been inaccurate.
But the Ombudsman said this was ‘irrelevant’ and, upholding the complaint, wrote: ‘The fact is, and RSA have admitted, that inaccurate data led to [the driver] being penalised because of the system installed by RSA.’
The spy in your car that should save you money
Gadget: A black box device. The number of telematics policies on offer has gone up by more than a third in just three years, from 33 in November 2016 to 51 today
- More than one million motorists in the UK have a ‘black box’ policy.
- The number of telematics policies on offer has gone up by more than a third in just three years, from 33 in November 2016 to 51 today.
- The black box will be installed in the car by an engineer for 27 of these, according to analysts Defaqto; 11 others use a ‘plug-and-drive’ system, where the driver has to install the device themselves; eight use an app to track driver performance; and the remainder give drivers the option of the above.
- The policies can be good value for newly qualified and young motorists. A 17-year-old newly qualified driver could insure a Ford Fiesta for £2,455.76 with a telematics policy, according to research from GoCompare. But the same female driver would have to pay £518.97 more for the cheapest policy that doesn’t come with a black box.
- A 30-year-old newly qualified driver could also save £136.64 on insuring the same car by opting for an £866.88 telematics policy.
- However, a number of scenarios can lead to inaccurate readings. For example, driving under a bridge can make some devices think you have broken the speed limit of the road above you. Furthermore, black boxes may not have registered increases in speed limits on certain roads.
- A loss of phone or GPS signal can also result in your car being tracked as moving from A to B more quickly than it actually did.
- Other devices with sensors can be too sensitive and may mistake a small bump in the road for a collision.
- If you’re considering a telematics policy, read the terms and conditions thoroughly. These will tell you what your device will monitor and what implications braking harshly, speeding and driving at night could have on your policy.
- More than four in five of the current telematics policies allow you to monitor the progress of your driving with an online dashboard. This can be useful when it comes to improving your score and potentially lowering your premiums in the future.
- It is also worth checking if the insurer will charge a fee for removing the device and fitting it into a new car.
- Policies where devices are installed by engineers are more likely to come with cancellation fees, to recoup the cost of fitting it in the first place.
Incorrectly recorded me speeding
Another motorist complained about the Aioi Nissay Dowa Insurance Company of Europe after his black box incorrectly recorded him as speeding for several months.
He told the Ombudsman that his consistent ‘red scores’ had led to arguments with his father.
The insurer eventually confirmed that the readings had been wrong, restored his bonus miles and offered him £200 in compensation.
Advantage Insurance, the underwriter for Hastings Direct, also admitted that it had incorrectly recorded one of its policyholders as speeding. The customer had received several warnings from the firm about his low score and was eventually told that his policy would be cancelled.
The driver went on to cancel the policy himself, but told Advantage he was concerned about the accuracy of his telematics device when it refused to refund his £210 deposit.
During an Ombudsman investigation, Advantage admitted that speed limits on roads had changed and the motorist had been wrongly penalised as a result. It was told to pay £75 compensation.
Insurance expert Tim Kelly, the director of the website Motor Claim Guru, says: ‘Too often, insurers will immediately cancel someone’s policy if a black box records a major incident, without offering them the chance to challenge the accuracy of the data.
‘Insurance firms should be carrying out due diligence to ensure the technology of the devices is accurate.’
An Association of British Insurers spokesman says: ‘Insurers and drivers naturally want to ensure telematics-based technology is as accurate as possible.
If a motorist is unhappy with their device and believes the information recorded is inaccurate, they should speak to their insurer, who should investigate.’
A spokesman for RSA says More Than’s Smart Wheels policy receives overwhelmingly positive feedback, adding: ‘We seek to learn from all complaints and we’re always striving to improve both our products and services for our policyholders.’
A Southern Rock spokesman says: ‘The providers of the telematics box have confirmed that the box would not provide inaccurate data.’
Spokesmen for Advantage and Aioi Nissay Dowa did not wish to comment further.
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