Cars in Northern Ireland are now being fitted with so-called ‘black boxes’ that could lead to cheaper car insurance for young drivers, the Belfast Telegraph can reveal.
And the company behind the initiative claims that the new ‘telematic’ technology — whereby a small device is installed in a vehicle — could see huge premiums slashed by up to 55%.
The encouraging news follows figures provided by the AA for the Belfast Telegraph which reveal that annual premiums for people aged under 22 have risen by almost 40% since 2010, and by 37% for those under 29.
Statistics supplied by the motoring body also show that young male motorists aged 17-20 years old now pay, on average, a staggering £3,515 per annum for a small car.
It also found that young men are being charged up to 51% more than their female counterparts (£2,330) for insurance. The exorbitant costs for young drivers have come under increasing scrutiny, with industry experts urging people to shop around for the best deals.
Kerr Group Insurance, a local, family-run broker, recently completed a year-long pilot scheme using black box technology with existing customers.
Following a successful outcome, the firm — which is the first in Northern Ireland to use this telematic driver information in practice — began offering lower premiums earlier this month.
“The price of car insurance is a hot topic, particularly for the 17-25 age group where insurance premiums have risen by more than 46%,” said Roland Kerr, the firm’s managing director. “Although the specific reasons for this increase vary, the single largest reported factor is the high frequency of road accidents involving young people.”
Insurance companies normally depend on parameters such as age and experience to determine the level of risk and thus calculate the cost of car insurance.
However, telematic technology allows each motorist’s driving behaviour to be monitored, including their speed, braking and acceleration.
“Every case is different, but a typical young driver could save between 35-55% on a standard insurance premium,” Mr Kerr added.
“We believe this solution will offer a more attainable level of premium for safe drivers and enable more young drivers to afford to keep a car on the road.”
Black box technology is expected to play a role in ending the illegal practice of ‘fronting’, according to industry experts.
The practice occurs when a lower risk driver, such as a parent, insures a vehicle in their name, although it will be primarily driven a higher-risk driver.
Fronting can invalidate a policy, leaving the driver uninsured after an accident and liable for the full cost of repairs to each vehicle, as well as any personal injury awards made in court.
By using the technology to track individual drivers, the broker can more accurately assess the primary user of the vehicle at the same time as moderating the driving behaviour of young drivers.
Fewer than 10% of private cars are currently equipped with black box devices, but the AA said it expects this figure to rise to 50% over the next decade.
An investigation by the Office of Fair Trading recently found that car insurance cover was around 11% higher in Northern Ireland than in the rest of the UK.
‘Device focused me on good habits’
Chris Rodden, from Limavady, was one of the first young drivers on the trial scheme over the last 12 months with Kerr Group Insurance.
The 19-year-old student’s car insurance would have been £6,431, but it cost £2,900 — a whopping 55% less — after he agreed to have a black box fitted to his Renault Clio.
His policy also covers his 17-year-old brother Matthew.
He said: “At first, I thought it would be like having ‘Big Brother’ watching me, but finding affordable insurance had been a struggle so it seemed a reasonable compromise to have the box installed.
“At the start I was a little bit annoyed about having it in the car, but after the first week I realised it was helping me maintain the good habits I had learned when I first started to drive.
“It also made me realise that driving recklessly doesn’t benefit anyone in the long-term because any sort of accident or mishap when driving is just going to raise the price of your insurance.
“It has helped me focus on driving safely, my insurance costs me less and my parents know I’m driving responsibly when I’m out on my own.
“The Renault Clio is my first car and the original quote to insure just me was £5,623, but that was reduced to £2,000 with a black box.
“However, my 17-year-old brother Matthew, who is a first-time driver, has also been put under my name on this car. That brought the cost of the policy up to £2,900, instead of £6,431 (without a black box), which I still think is a pretty good deal.”
Take TV ad opera singer’s advice
By Claire McNeilly
If you haven't changed your car insurance provider for a couple of years, you are probably paying far too much.
Rather perversely, we seem to live in a world where customers are penalised for their loyalty rather than being rewarded for it.
But there will always be bargains to be had as companies chase down elusive new clients.
It happens in supermarkets, fitness centres, banks.
But nowhere is it more evident than in the cutthroat world of car insurance, where so-called roll-over contracts tie us into agreements we might not have renewed had we had a choice.
Of course we do have a choice, but it’s so easy to forget to check the available options in time as the end of a contract creeps up. And it doesn’t help if the insurance company doesn’t warn us in advance. But why should they?
It hardly makes commercial sense to alert customers to an escape route.
Sometimes we only find out our premiums have risen — by up to £200 a year in some cases — when the monthly direct debit goes into overdrive.
By then, of course, it’s too late to get out of the new contract — because then there will be a cancellation fee of around £100 to contend with.
The good news is that more firms are insuring Northern Ireland motorists than ever before.
Comparison websites such as moneysupermarket.com, gocompare.com and confused.com are invaluable tools.
Get quotes from them before approaching an insurer or broker independently; you’ll be astounded at the savings. If the insurer wants your custom they will often match the cheapest quote. It is a lucrative enough business without us adding unnecessarily to its bulging coffers.
So take that irritating, mustachioed opera singer's advice and go compare.