Telematics insurance policies see 9% boom

Car insurance policies using ‘black box’ telematics technology have seen a 9% rise since December 2013, according to new statistics from the British Insurance Brokers’ Association (BIBA).

With current figures putting the number of telematics car insurance policies at 323,000, the report revealed that an extra 27,000 policies were taken up since the last study.

The report said that telematics is helping careful drivers to gain savings of up to a quarter - with young motorists, who often struggle to find affordable cover, able slash their premiums by up to £1,000.

Telematics technology works in the car insurance sector by scoring drivers using a ‘risk profile’, which monitors a number of factors, such as speed, acceleration, braking, cornering and road familiarity.

Given the increase in policy take-up, BIBA is now petitioning the government to relax its insurance premium tax (IPT) charge of 6% for young drivers to make driving more affordable and reduce accidents.

Andy Watson, CEO Ageas UK said: “Removing IPT on telematics products would increase take-up and promote safer driving among young people. It would reduce the number of serious road crashes – which cost the economy an average of £400,000 each according to the Department for Transport.”