Spying on my driving? If it keeps my premiums down, hell yeah!

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Would you be prepared to have a little black box monitor your driving if it kept your car insurance affordable? I look at the new wave of young driver policies to see if they really work…

Iona Bain

For young drivers, the spy in the car is really catching on. And no – I’m not talking about giving James Bond a lift to his next mission.

If you don’t know what I mean, and especially if you are a young male driver under 24, you are probably paying too much to insure your motor.

The sad fact is that some young men wish they could be 007 himself, copying the spectacular chase sequences in films like Quantum of Solace – with often disastrous consequences.

Newly qualified motorists are more likely to be involved in a traffic accident during the first two years after passing their test, according to the road safety charity Brake, with one in five new drivers having a crash within six months. Nearly three in four deaths among young adults are now on the road, and very often, more 16 to 19 year-olds die as passengers in cars than those who die as drivers.

Subsequently, newly-qualified drivers are paying a horrendous cost for insurance. Figures quoted recently, which all seem to measure on a different basis, include £7,091 as the cheapest quote for a 17-year-old driver (Institute of Advanced Motorists), £5,957 for newly-qualified drivers (moneysupermarket.com), and £4,006 as the average cost for a 17-20-year-old compared with £858 for the average motorist, (confused.com/Towers Watson index).

AA Insurance, which puts the average cost for a 17-22 year old at £2,431, says the inflation of premiums for potential boy racer motors “is all about the potential damage their irresponsible use can inflict – entirely preventable car crash injury claims of £5m or more are becoming increasingly common”.

And with 450,000 young drivers passing their test every year, it is hardly surprising that many just don’t buy insurance at all. The Motor Insurers’ Bureau claims that 20% of motorists aged 17-22 are probably driving without any insurance.

But some changes are afoot. In only my third blog back in May I highlighted the smartboxes now being offered to smart young drivers by smart insurers, which use the science of ‘telematics’ to measure your driving skills. The better you drive, the lower your insurance premium. It is the kind of ingenious technology that the legendary “Q” would come up with.

But does it work in reducing your premiums? Let’s find out…

Nearly 90% of motorists with The Co-operative’s Young Driver insurance have seen more than £100 returned to their bank accounts, after proving themselves as safe drivers. The cashback reward tells drivers that they have successfully observed speed limits, avoided jamming on the brakes, and taken corners carefully since the Young Driver scheme was launched in March.

The Coop’s scheme installs the smartbox in your car and takes readings every 90 days, building up a scorecard for driver behaviour (though anyone driving the car will be monitored –so don’t lend it out to any boy racers of your acquaintance).

If the read-out shows top-level scores in all three categories (speeding, cornering, braking and acceleration) and also shows the car has not been driven in the wee small hours, the happy driver gets a partial refund on his original premium.

David Neave, the Co-op’s director of general insurance, has now called on other insurers to “play their part in finding similar solutions so that as an industry we can offer fairer prices to all young drivers in the UK”. Right on.

He points out that insurance has been rising at a disproportionate rate for young drivers, but telematics offers a “genuine solution to stop this trend and prevent a generation of young people being driven off the roads”.

And he goes on: “More than that, we can see that our ‘carrot’ rather than ‘stick’ approach of rewarding motorists for driving responsibly is leading to better driving behaviours. Our scheme is only in its infancy, but if it was taken up on a larger scale it could be a major step forward in improving the safety on Britain’s roads.”

Which? Has backed the initiative, saying schemes such as the Co-op “should help ensure that a new generation of drivers will have access to more affordable cover, and be rewarded for safe driving”.

It cuts both ways too. If you try to put one over on the spy, by repeatedly breaking speed limits or taking corners too sharply, your premium will actually go up, by up to 20%. Extreme driving behaviour recorded on the box will prompt cancellation of insurance, the Co-op warns. It is not kidding – three policies have been cancelled this year.

The insurer has mustered charity Brake to its cause. Campaigns director Julie Townsend says: “A huge proportion of deaths and serious injuries on our roads involve young drivers, and many of the victims are young people themselves – road crashes are the biggest killer of this age group.

“This is an innovative and practical way to help young people protect themselves and others. We hope it will help to pave the way to a safer driving culture among young people, and fewer devastating deaths and injuries on our roads.”

The data collected from a sample of 1,300 young drivers shows that nearly four in five (78%) consistently drive within speed limits. It also shows that 40% of males achieved the top score in all categories while females did better at 41% – but only just!

The Co-op’s young drivers are eligible for a maximum annual discount of 11% of the initial premium they paid. Based on the driving behaviours shown in the first 90 days, the average refund is 8.5%.

The average premium paid by customers with Young Driver insurance is £1,727 even before discounts are applied, compared to the average premium of £2,294. So the average discount brings it down to £1,583, or £131 a month. Spy-in-car results have also been declared by insurethebox, a specialist insurer which launched its telematics-based policies in June 2010 and has 40,000 customers. They show that around two thirds of its policyholders who received renewal notices in July and August were offered cuts in their insurance premiums compared to last year. Some savings came to as much as £800 or more – at a time when premiums were rocketing by up to 30%.

The average renewal saving during July and August came to 22% of their previous year’s premium. On the other hand, some motorists who had not driven so carefully saw their renewal premiums rise.

With insurethebox policyholders buy an initial 6,000 miles of cover. A ClearBox, installed behind the dashboard, monitors their driving and assesses their performance by five different criteria. Good drivers receive up to 100 bonus miles per month. Each policyholder has their own online portal where they can check their progress, how many extra miles they have earned and how they could have earned more. The company’s chief executive Mike Brockman says most customers have “risen to the challenge of telematics and are making a big effort to drive safely”.

Young Marmalade, which specialises in car insurance for younger drivers, has also been cutting premiums for its telematics-based drivers. Its Intelligent Marmalade begins by offering you cheaper insurance, then increases it if the smartbox catches you out.

I’ve been driving for four years and my premiums have started to go down at last. This month I’m going to trial the Co-op’s smartbox in my car and find out how safe I really am. I’ll keep you posted.


If you have already passed the standard driving test, consider signing up for Pass Plus. But only certain insurers will reward you by cutting your premium.

You take an additional set of lessons that help you cope with more challenging scenarios and help you drive more safely. Yes, it costs, but it can vary on where you live and what driving school you enrol at. You also get up to 50% off the cost with subsidies from some local councils. You are then eligible for a discount on some insurance policies and sometimes the saving this generates outweighs the initial cost of the lessons. Please note that (sadly) the number of insurers offering this benefit are small. However, the fact that you will have gone on the course will then help you drive in a safer way. Go to the Direct.gov.uk for more details.

If you live at home, you might be able to add a parent driver to your policy.

If you add an older driver to the policy, you can cut your premiums down significantly. But proceed with caution. There has been a well-documented trend in car insurance where a parent insures their child’s car in their own name and names their child as a second driver on the policy. This is illegal if the parent isn’t the primary driver. Although many people don’t realise it, it can have serious consequences should you make a claim. If the insurance provider believes you have been “fronting”, as this practice is called, you can be refused a claim, the policy can be cancelled and you could even be prosecuted for fraud. There are no exact figures as to how many people have been subjected to this punishment and it is up to the insurance company to prove that you have been doing this.

Insurance companies have tried periodically to deter “fronting”, but companies appear increasingly reluctant to publicise the behaviour should it give people any ideas, particularly when it seems quite hard to catch “fronters” in the act. But if you fell foul of the law, the long-term cost would definitely not be worth the risk.

Nonetheless, there is nothing wrong with you being named a second driver on a car if you really are the second driver. If you live at home and share a family motor, for instance, you could reduce your premium payments by being added to your mum or dad’s existing policy or having your parents added to yours. Okay, you won’t have the same freedom sharing a car with others. But the compromise could be worth the saving.

Consider schemes specifically designed to help young drivers keep costs down, from learning right through to passing and buying a car.

The Provisional Marmalade policy can offer insurance policies to young drivers practicing in the family car that cost between £90 and £100 each month. Its sister scheme, Young Marmalade, combines purchasing a low cost car with enhanced safety features and discounted insurance. The saving on insurance applies if you nail the Pass plus course within 30 days of passing your test and if you prepared to keep off the road between 11pm and 5am, based on the fact that 95% of claims they see are based on accidents that happen nocturnally.

Use your drive if you have one

By keeping the car either on the drive or in the garage overnight, you can ask for a lower quote from many insurers.

The main way to lower your costs in the long term is to be ultra safe.

This is especially the case if you’ve only just passed. Try not to drive at night or on busy roads at peak time and in challenging weather conditions like snow and ice. Avoid becoming a late night taxi for friends and absolutely no drinking/drug-taking. As you build your no claims bonus, you will start to see light at the end of the tunnel.

This Post Has 3 Comments

  1. Avatar
    learn to drive

    Road safety – or insufficient training – destroys so many – and teens, the worst. Thankyou for the article

  2. Avatar

    Safe driving is essential. Too many young drivers drive recklessly to impress friends and end up coming off very badly. Sadly I remember two 18 year olds at my school died in a car accident after pushing their car beyond their driving ability. Rewarding safe driving by reducing insurance premiums is a great plan. Savings must be big too!

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