Telematics explained

Find out about telematics car insurance

What is telematics insurance?

Telematics insurance is a policy where your insurance company monitors how you drive and adjusts your costs based on your driving habits. There are several types of telematics policies, including:

  • Telematics box, also known as black box
  • Plug-and-drive
  • Pay per mile
  • Telematics app

The most popular type of telematics insurance is a telematics box, which is a small device that’s installed in your car. The device uses GPS to relay data about your driving to your insurance company. They use this data to judge how safe your driving is and give you a driving score.

Your driving score reflects how safe a driver your insurance company believes you are, usually ranging from 0 to 100. The higher the score, the safer you’re thought to be and the more you could save on your insurance costs. Most insurers let you track your scores and let you send feedback through a custom driving dashboard.

We can help you find telematics insurance - just look out for the telematics or black box labels when you get a quote.

Should I get telematics insurance?

Car insurance is a legal requirement. But whether a telematics policy is right for you depends on your circumstances. Choosing a telematics insurance policy could be a good way for young or inexperienced drivers to get insurance and start building up some driving experience.

Younger and inexperienced drivers are often seen as a higher insurance risk. To cover this risk, insurance companies tend to offer higher prices for their policies. Telematics insurance policies could help bring down the cost for the trade-off of having your driving monitored.

Other benefits include:

  • Your insurance costs get lower if you keep proving that you’re a good driver in your driving scores
  • You get personalised tips and feedback, so even if you’re not the best driver you can still improve your driving
  • An anti theft GPS tracker, so if your car is stolen, your insurer should be able to locate the car straight away
  • Low mileage drivers can see savings too, which is ideal if you don’t use your car regularly

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Telematics box installation: how does it work?

Your insurer installs a telematics box for you, which typically takes about an hour.

The box is most frequently fitted beneath the dashboard or the bonnet. This depends on the provider’s particular device, and the car itself.

While your telematics box can actually go anywhere, insurers tend to put them out of sight. It’s best not to tamper with the device, especially as this defeats the object of getting one. The GPS technology that telematics boxes use makes the car easy to find if it’s stolen, so you wouldn’t want a thief to try and remove it.

The cost of installation is usually covered by the insurer.

What data will my telematics box collect?

Your telematics box uses GPS technology to collect data on your driving. The focus of the data is generally on your speed, acceleration, braking and what time you drive. Your driving behaviour is monitored across a variety of journeys to give you an average driving score.

Your insurer also uses the data to give you personalised tips on how to improve your driving. Telematics boxes capture data on:

  • Maximum and average speed
  • Acceleration
  • Braking
  • Cornering
  • Mileage
  • Number of journeys
  • Journey time
  • Road type
  • Impact detection

Are there different types of telematics insurance?

Yes. While a telematics box is the most popular type of telematics insurance, there are other ways insurance companies can monitor your driving.

Some insurance companies also offer:

  • Plug-and-drive insurance
  • Pay per mile insurance
  • Telematics app

Plug-and-drive is similar to a telematics insurance policy but you can install the device in your car yourself. Your insurer sends you a device that you plug into your 12v power socket, also known as the cigarette lighter. The device records your speed, braking and cornering.

Pay per mile policies mean your insurer adjusts the price of your insurance based on how far you drive. The less you drive, the cheaper your insurance could be. You’re charged a set amount to cover your car while it’s parked, and then a small additional cost for every mile you drive. A small device or mobile app is used to measure your distance.

Telematics app policies mean your insurer can record how you drive using an app on your phone. The app uses GPS to monitor your speed, acceleration and distance.

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Can I save money with telematics insurance?

Yes, if you drive safely then you can expect a discount on your car insurance.

The price of your policy may fall simply because you agree to have a telematics device in your car. But your driving score determines what happens to your insurance prices as you drive.

If you’re more careful than the average driver and get a good driving score, then you could pay less. However, if you get lower driving scores than average, you could find yourself paying more for your insurance. This means you should drive carefully on a consistent, long-term basis.

Remember, there are no guarantees. If you don’t get good driving scores and don’t learn from the personalised tips and analysis, then a standard insurance policy might suit you better.

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Who is telematics for?

As telematics policies can significantly reduce the cost of car insurance, It could also be a great way to save for those people viewed as higher risk by insurance companies:

  • Young drivers are suited to telematics insurance. As drivers aged 17-24 are inexperienced, they’re viewed by insurance companies as higher risk. Telematics policies are a great way for young drivers to save on their car insurance costs while they gain driving experience.
  • Inexperienced drivers can also make the most of telematics insurance policies. Drivers who’ve recently passed their test tend to pay more for their car insurance. Proving you’re a responsible driver by getting good driving scores could save you plenty on your car insurance.

There's no upper age limit or restriction on telematics policies, so older less experienced drivers might also benefit from a policy.

Is telematics insurance just for younger drivers?

No, older drivers can also get cheaper insurance through telematics insurance. If you’re a more experienced driver and you’re prepared to drive carefully then you could save money.

Younger drivers, aged between 17-24, tend to bigger discounts than with standard car insurance because they tend to pay so much more to start with. Insurance companies generally view younger drivers as higher risk.

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What our expert says

Some telematics insurance policies come with mileage restrictions or curfews that limit how much and when you drive. And if you breach these restrictions, you might have to pay more for your policy. I recommend you check the policy details carefully so you're aware of what restrictions might be attached.

Louise Thomas - Car insurance, personal Finance, mortgage and life insurance expert signature

Louise Thomas

Car insurance expert

Need more help?

Will a curfew apply if I choose a telematics policy?

Some insurers use a curfew system, but these tend to be on an opt-in basis. You might choose a curfew policy because you can get cheaper cover. But you then run the risk of a penalty if you have to drive at a time outside of this.

Even when there's no curfew on your policy, your driving score could still go down if you drive late at night or in the early hours of the morning. Your insurance company might view driving between the hours of 11pm and 5am as higher risk, so you could see the impact on your driving score.

Will my mileage be restricted on a telematics box policy?

When you have a telematics box installed, you usually agree to limit yourself to a set number of annual miles. You should think carefully about the number of miles you expect to drive before you buy a policy.

If you use your annual mileage allowance and need to add more, most insurers allow you to do this for an added cost. The exact cost depends on the insurer, so have a look at the policy details if this is something you think you might need to do.

It's worth speaking to your insurer before you go over any mileage limit as they might be able to amend your policy for a fee.

With pay-as-you-go policies, you may be charged automatically if you exceed your limit, but haven’t topped up in advance.

And some policies let you use additional miles that you’ve built up. For example, you may be awarded extra miles for good driving throughout the year.

How can I improve my driving score?

The better you drive, the higher your driving score and the cheaper your insurance. Most telematics box setups provide you with personalised tips to improve your driving score. These include:

  • Smooth accelleration
  • Braking in plenty of time
  • Keeping to the speed limit

Depending on your insurer, it might also help your score if you avoid driving at certain times of the day. For example, driving between 11pm and 5am might be viewed as higher risk by some insurers.

Don't worry if you've to brake hard every now and again or make the occasional emergency stop - it’s unlikely to have a major impact on your driving score. Driving scores are based on several variables across several journeys to give a well-balanced view of your driving behaviour.

What happens if I speed with telematics box insurance?

Occasionally breaking the speed limit by a small amount might not affect your telematics insurance policy much. But continually breaking speed limits, especially by significant amounts, is likely to seriously impact your driving score. And it could even lead to your insurer cancelling the policy.

Insurers don’t use telematics data to pass on evidence of motoring offences to the police, but there may still be repercussions from speeding. If you want to lower the cost of your insurance by being considered a good driver, it’s best to stick to the speed limit.

Can I get telematics insurance on older cars?

Yes, your insurer should still be able to fit a telematics box in an older car. But the age of the car could affect the kind of box that can be installed. Some vehicles may need a modification so your insurer can install the box.

Can someone else drive my car?

Yes, as long as they're a named driver on the telematics policy. If someone else does drive the car, then that person is using your miles and their driving counts count towards (or against) your good driving score.

This is really no different from a standard insurance policy.

Can I cancel a telematics policy?

You can cancel your insurance policy at any time but you may be subject to cancellation charges and admin fees as outlined in the terms and conditions of your policy. Speak to your insurer for more information.

For more tips, read our guide on making changes to your policy.

How do I get my telematics box removed?

If you’re cancelling the policy or not renewing, you shouldn’t need to have the box removed – it just stops gathering data.

Should you still want to have it removed, you may need to pay for a professional to take it out. You need to get the box removed if you’re selling your car mid-policy – again, there may be a charge.

Can I drive abroad with telematics insurance?

Yes, you can normally drive abroad with telematics car insurance. Many policies include up to 90 days' cover to drive in the EU and certain other European countries. If you’re planning on driving abroad, you should check the terms and conditions in your policy.

How long do I have to have a telematics box for?

Telematics insurance policies last for 12-months, just like a standard car insurance policy. When your policy is due to renew, you can decide if you want to continue with a telematics insurance policy for another 12 months or switch to standard car cover.

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