Black box car insurance policies – which see the location and driving data accustomed set insurance premiums – are slammed as “exploitative data-for-discounts schemes”, amid privacy concerns and a series of complaints that malfunctioning black boxes have seen drivers threatened with cancelled insurance policies. The Financial Ombudsman Service (FOS), which regulates the UK insurance industry, admitted in 2018 that it had received complaints from “a number of people who believed the data their ‘black box’ had collected wasn’t right”.
Those growing numbers could even be linked to the increasing use of black-box policies, but a worrying number of readers have contacted Auto Express to complain that their telematics devices had gone wrong – sometimes significantly so.
“106mph” during a 30 limit
Emily D wrote to us after her recorder provider E-mailed, claiming that she had spent an extended period driving at 106mph during a 30mph limit. also as being a speed Emily said she would “never dream” of reaching, true of the alleged incident meant she would have had to travel 120 miles from her home in but a flash. Her recorder also deemed a part road with a 60mph limit to be a 30mph zone.
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Emily contacted her insurer, and it admitted that the results were “bogus”, although the company assured her false readings like this were “very rare”. “I wasn’t impressed to say the littlest amount,” Emily said. “Is it really worth having a recorder if they’re this faulty? It seems insurers have to be compelled to update or upgrade them, or just stop using them altogether.”
Case study: Ian L’s daughter
Because telematics insurance is typically purchased by new drivers who otherwise struggle to urge affordable cover, many of those with malfunctioning black boxes are young, and may not be experienced in handling complex complaints. So when Ian L’s daughter received an e-mail telling her that her insurance would be cancelled within seven days because of her allegedly poor driving, Ian contacted the company on her behalf. From day one, Ian’s daughter had complained about the accuracy of the recorder, which rarely marked her acceleration and braking above 0 out of 100. Ian said his daughter drove sensibly and appropriately and had even been given discounts for
her driving with previous telematics policies.
After hours spent on the phone, Ian was able to get the cancellation delayed while the insurer reviewed the data. Ian asked the company to produce specific journey times where the infringements had allegedly taken place. These investigations uncovered incorrect data had been logged by the recorder, and so the corporate agreed to strike the low scores from Ian’s daughter’s records. Ian told us: “I can see the benefits to insurers of the black-box system, but the heartache it causes when data is inaccurate isn’t advantageous to good driving habits, because it shifts the most target from correct driving procedures to fear.”
Rising recorder complaints
The FOS doesn’t track what percentage complaints it receives over recorder insurance. The organisation does, however, log the complete number of complaints it receives for car and motorcycle insurance, and this almost doubled from 7,190 within the 2013/14 twelvemonth, to 12,977 in 2018/19.
While there is not any way of telling what percentage of these complaints related to telematics insurance, British Insurers’ Brokers Association estimates there are just 296,000 recorder policies in 2013, and around 1,000,000 today. Commenting on our investigation, Silkie Carlo, director of privacy group Big Brother Watch, said: “Affordable insurance shouldn’t be predicated on intrusive surveillance and profiling.” Carlo said the actual fact black boxes malfunction is “totally absurd”, and added: “We oppose these exploitative data-for-discounts schemes and urge insurance companies and customers alike to reconsider using them.”
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The Association of British Insurers said that black-box insurance was of “particular benefit” to young drivers, and advised: “Where a motorist is unhappy with their device and believes the knowledge recorded is inaccurate, they should speak to their insurer, who should investigate.” A spokesperson from the FOS said drivers should complain to their insurer if they feel that their recorder device has malfunctioned. If this does not solve the problem, they should contact the FOS, which could “decide if the insurer has treated you fairly and [has] the ability to position things right if they haven’t”.
Cancelled policies have to be declared forever While insurance companies will only ask about speeding convictions issued within the last five years, and even drink-drive convictions become ‘spent’ after 11 years, anyone who has ever had a policy cancelled on them – as can happen with malfunctioning black boxes – must declare this for the rest of their motoring life. As a result, the cover could even be permanently harder and costlier to secure. Drivers whose cancelled black-box policies are subsequently overturned on the thought of faulty data are advised by the Financial Ombudsman Service to urge written evidence to elucidate this cancellation to future insurers. However, this might be a consolation to innocent drivers who are unable to prove that their black boxes have malfunctioned.
Reader’s complaint highlighted box issues
In May 2018, we investigated the case of student Cydney Crean, who had been accused by her insurer of speeding on three separate occasions, despite timestamped home CCTV footage clearly showing her Fiat 500 parked on her driveway when the alleged offences happened.
Cydney’s insurer said it would cancel her policy, but after our intervention admitted “the clocks changing to British Summer Time” had caused “data inconsistencies” in her recorder. Cydney’s insurer maintained she had been speeding, but despite this claim fitted a replacement telematics device to her car, arranged a 50 per cent discount for the remaining balance of the policy, and offered £150 in compensation.