Car Insurance: Privacy Concerns Stall Uptake When it Comes to Black Boxes

Car insurance, especially for the under 25s can be shockingly expensive. One solution is a black box, or telematics app/USB plug-in device. But people are worried about where that location and time stamp data is going. Here’s the word;

Concerns over snooping could be leading to motorists paying hundreds of pounds more on their car insurance each year, new research has revealed. Despite the promise of lower premiums and personalised cover, research from IMS, a global leader in connected motor insurance solutions, reveals that data privacy concerns are the number one barrier stopping UK drivers from embracing Usage-Based Insurance (UBI).

Previously referred to as ‘Black Box’ car insurance and typically deployed for inexperienced drivers, UBI is a type of motor policy where premium is based on driving behaviour, not just age, postcode, or vehicle. These days, insurers mostly use smartphone apps to track things like speed, braking, mileage, and time of travel to assess a policyholder’s road risk more accurately.

In some cases, UBI policies could save drivers up to £1,137 a year. But in one of the most comprehensive international surveys to date, involving over 5,000 motorists across five countries, including the UK, more than half of respondents told IMS they were either unwilling or unsure about adopting UBI, even though 72% were open to the idea in principle.

A quarter of UK drivers expressed concern about sharing their personal driving data, with fears of data misuse, security breaches, and location tracking topping the list.

Andrew Brown-Allan, EVP Growth at IMS, said: “Consumers see the benefit in fairer pricing and personalised cover, but they want to know exactly what’s being collected, how it’s used, and who has access to it. That level of transparency simply isn’t the norm in the insurance industry yet – and consumers clearly have reservations about sharing any more data than they are already expected to.”

Black boxes, smartphone apps, and connected cars are already used to monitor driving habits like speed, braking and mileage – and can reward safer drivers with significant savings. But IMS’s data shows that for many, potential financial gain isn’t enough to overcome concerns over privacy.

The report found:

• 62% of UK motorists said they were worried about sharing their personal location information.
• Just 32% currently allow or would feel comfortable sharing their driving data.
• Just 19% of UK drivers have ever used a UBI product.

While the technology is here, and the benefits are real, IMS argues that UBI will remain a niche product until consumers’ privacy concerns are addressed.

“Insurers must treat additional data from consumers as a privilege, not a right,” Brown-Allan said. “People need to feel they are in control of their own driving data – that it works for them, not against them.”