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Could black box insurance become mandatory?

Drivers could be forced to use telematics or face a more expensive insurance premium.

Motorists will have to ‘opt out’ of tracking systems that monitor driving habits at all times and in doing so could face paying more for their car insurance within the next ten years, according to a report in the Telegraph.

The newspaper claims a number of major insurers will be launching high-tech black box telematics systems within the next year that will inform insurer of your driving habits, including how often you use your car, where you go and other driving behaviours such as when you brake and how fast you drive.

GoCompare’s Tom Ellis told the Telegraph at the British Insurance Brokers’ Association (Biba) seminar: “In 10 years’ time there will still be customers who prefer not to have a telematics device installed, [but] it will be an opt-out situation, rather than an opt-in.”

“There will be reasons for people opting out – perhaps because they are bad drivers, or unhappy with the privacy element, or have an old car. But they will have to accept a higher premium to insure their car,” he added.

Black box telematics technology is predominantly used by younger drivers who face the highest premiums. Having a tracking system is said to reduce premiums by more than £400 for drivers aged 17 to 19 and an average of £90 for over-25s. Biba said it has seen a 60 per cent increase in sales of telematics car insurance.

Ofir Eyal of management consultancy company Boston Consulting Group estimated that 50 per cent of cars could have a black box system installed by 2020. He went onto say refusing to use telematics could limit your insurance broker options.

“We are aware of insurers considering whether they should only take on new customers with telematics,” he commented. “We can see a situation where insurers will only be interested in certain types of customers, such as those who are willing to take a telematics policy.”

Critics argue an invasion of privacy and that driving habit data could fall into the wrong hands. There have also been incidents where black box systems are allowing insurers to slap motorists with fines and even two teens that died while trying to beat an insurance company’s curfew.

The choice could already be made up for UK motorists. Under EU regulations, new cars built from October 2015 onwards will be fitted with a form of telematics known as eCall, which is designed to tell the emergency services where your vehicle is in the event of an emergency.

Should car insurance companies know your every move? Is your privacy worth a few quid less on your premium? Let us know.

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