New black box scheme to lower car insurance costs for young drivers

Wed, 16 Mar 2011

The Co-operative Insurance has launched a new product which will see car insurance premiums for young drivers calculated based on driving habits.

It will use a Smartbox installed in the policyholder's car to monitor driving behaviours such as braking, acceleration and speed, which will be transmitted back to the insurer via satellite.

This will then be used to calculate premiums and rewarding safer drivers with lower costs.

The Co-operative estimates the product, which is available to those aged between 17 and 25, will be an average of £328 cheaper than competitor prices, and over three quarters (82 per cent) of young drivers could make a saving.

David Neave, director of general insurance, said: "It is a fact that many young people are simply being priced out of owning a car due to the escalating cost of motor insurance for young drivers.

"To ensure we do not end up with an entire generation priced out of car ownership we are giving them a chance to prove themselves as responsible drivers, and dispel the assumption that all young drivers will drive badly and have accidents ."

It follows a recent ruling by the European Court of Justice that insurance firms can no longer use gender to calculate premiums, something that is likely to raise car insurance costs for young women in particular.
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