Car Insurance and Tech

Car technology is a massive field to try and get your head around, but there's one reason why you should attempt to understand the tech that's out there – the potential for lower insurance premiums.

The type of technology that you use in your car can help to lower the cost of your insurance. Here's why and how.

Car insurance technology

Car technology can be used to lower the risk of an accident or a possible claim from happening, making it very attractive in the risk-aversive eyes of the insurance company. They’ll then give you a lower cost, reflecting the lower risk that you present thanks to the technology.

You’ll find that there’s quite a few pieces of tech that can help to lower the cost of your car insurance, but I’ll be dealing with the three main ones below.

Telematics, or the ‘black box’

The black box also known by its proper name of telematics – is one of the most well-known types of car insurance technology. It’s a really effective way at reducing the cost of your insurance, if you’re willing to make a few compromises along the way.

How it works

The black box is roughly around the same size of a mobile phone. It’s fitted to your car and it will collect data about your driving habits every time you make a journey in the car. It usually collects information about things like the time of day you drive, your location, your acceleration, your braking and your cornering. From this data, the box builds up a picture of how safe you are as a driver, and the insurance provider will vary your monthly premiums based on this info.

High-tech security features

Okay, it’s probably not a specific car insurance technology, but I’m including it here because investing in high quality security tech can help to reduce the overall cost of your insurance, so it should be considered a type of car insurance tech really. .

How it works

One of the many factors that an insurance company uses to work out how much to charge you in terms of insurance is how secure your car is – if you use a padlock to keep your car secure, expect to be on the receiving end of the insurance company’s higher premiums. Choosing state-of-the-art technology to keep your car from getting stolen or broken into is one way to lower your insurance cost. Security tech that insurance companies look highly upon include immobilizers, vehicle tracking systems, and steering locks.

Dashcams

Dashboard mounted video cameras have massively come down in price over the last couple of years, and some insurance providers offer discounts if you have one that they approve. Dashcams record every journey that you take in your car, making a video of the entire trip which can then be referenced at a later date. This makes it useful way to refer to what your actions were when driving, making it popular with insurers.

How it works

The theory goes, that dashcams will help to be able to work out who’s responsible for an accident and for the piecing together the exact decisions that led to a collision. Having a camera recording your driving experience will provide physical evidence that can help to speed up claims, so insurance companies like them. You can pick up a cheap, new one for around £50, so the reduction you get in insurance might be worth the initial cost.

Pros of car insurance technology

  • If you’re in a group that is faced with extortionate insurance costs – like a new driver, a young person, or someone who’s had a few claims already – car insurance technology can help to provide a cheaper route to insurance.
  • It can help to make you a much safer driver and encourage good driving habits.
  • If you’re investing in things like security features, car insurance-focused technology can help to improve the protection of your car.

Cons of car insurance technology

  • Having your every driving habit scrutinised by a tiny computer can feel a bit like you’re living in a Black Mirror episode.
  • You’ll have to pay for the installation of the black box – and it’s unlikely to be cheap.
  • If you’re not as safe a driver as you think you might be, expect to get caught with consistently high monthly premiums.