21st April 2015
Only 3% of British motorists have a telematics car insurance policy, which uses an in-car computer to monitor their driving and potentially offer discounts on the cost of cover.
The study by uSwitch.com, the comparison website, found that , despite telematics being introduced over ten years ago, only 25% of drivers know what it means.
Meanwhile, 26% won’t consider taking out a policy, with ‘big brother’ surveillance the biggest cause of concern (62%) followed by fear of personal data being sold onto other companies (49%).
Drivers said that £98 is the minimum they would need to save on their annual premium to consider taking out a telematics policy. Those aged 18-34 would need to save £173 to consider taking out a policy, while those over 65 would be happy with just £72 of savings.
Telematics, also known as ‘black box’ insurance, aims to offer drivers cheaper premiums by basing them upon actual driving habits rather than statistics.
Ahead of the Department for Transport’s study on telematics and its potential impact on road safety for young drivers, the uSwitch.com research reveals that not all drivers are against telematics solutions.
It found that 45% of drivers would consider installing a ‘black box’ – to learn more about their own driving skills (33%), to improve their driving (23%) or to see how well others are driving their car (5%).
The research also reveals that drivers are confused about what happens with their data and who owns it.
When asked, 58% incorrectly believed that telematics data is shared between insurers, 35% thought they could use their telematics data when applying for insurance and 14% believed they own their own data
Rod Jones, insurance expert at uSwitch.com, says: “Despite telematics being nearly ten years old, drivers are still in the dark about ‘black box’ insurance – confused about the technology and the full benefits it can offer.
“Concerns around personal data are a major barrier to telematics adoption – in particular, how the data will be used and by whom. It’s vital that the Government and the insurance industry addresses these concerns if this technology is going to take off.
“Until this happens, telematics insurance policies are likely to remain a low priority for drivers. Millions of drivers may be missing out on hundreds of pounds of savings each year, especially young drivers who are faced with high car insurance premiums.”