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Brits shunning telematics insurance over privacy concerns

A Telematics car insurance policy can help lower your premium, but it seems the majority of Brits are more worried about privacy – and some have never even heard of them.

A mere three per cent of Brits have taken out a telematics policy, according to research by price comparison website uSwitch.com, even though the technology has been around for more than a decade.

Reasons for going against ‘black box‘ insurance, which allows insurers to track where you drive, your speed and can even limit your mileage, includes thinking it’s too ‘big brother’ (62 per cent), privacy (26 per cent) and not wanting their driving monitored (37 per cent).

Furthermore, nearly half (49 per cent) said they were concerned their data might be sold to other companies, while 33 per cent disliked the idea of their car being tampered with, according to the 1,146 British adults surveyed.

Not everyone is against the idea. 45 per cent of Brits said they would consider it, citing it would help them learn more about their driving skills (35 per cent), improve their driving (23 per cent) and would allow them see the driving habits of others such as their children (5 per cent).

The crippling cost of insurance for young drivers makes telematics more tempting for those aged 18 to 34 years old, but this age bracket would only consider it if the could save a minimum of £173. Those aged over 65, meanwhile, were less fussy, requiring a minimum saving of £72.

The research also highlighted ignorance surrounding customer data. 58 per cent incorrectly assumed it was shared among insurers, 35 per cent thought they could use the data when applying for a policy and 14 per cent assumed they owned their data.

Insurance expert at uSwitch, Rod Jones, said: “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.”

A report in the Telegraph newspaper claimed black box insurance would become mandatory within the next decade, with motorists having to opt out.

Citroen became the first car manufacturer to install a telematics device as standard back in 2013. Those aged between 19 and 75 years old were eligible for a year of free insurance when buying a C1 supermini.

Telematics played a role in the death of two teenagers, who were rushing home to beat a curfew imposed by the insurer that would have meant a fine of £100 for breaching policy rules.

There have been concerns that black box insurance can, in fact, work out more expensive than a standard policy.

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