Black Boxes for Cars: What it Could Mean for Your Insurance Costs

Many new cars today come with a black box device already installed. These little gadgets, not unlike the famous black boxes on airplanes, record incidents that occur to the vehicle such as crashes. The technical name of these little boxes is the Event Data Recorder, or EDR, and their job is to record information in the event of an accident.

The box, which is actually silver in color, is important because it records information including the speed you were driving, the time and date of the crash, whether an airbag was deployed and whether seatbelts were being worn, among other details. While it doesn’t have information about who was driving or the location of the crash, it is still a very useful piece of equipment for analyzing crashes and improving car safety.

Who sees the information?

Of course, car developers aren’t the only ones interested in the information stored in the black box. Just who is allowed access to it, and what that information is used for, is the matter of some controversy. Police officers could use the information in court cases to determine fault in an accident, but in most cases they have to have a warrant to obtain the black box information.

Insurance companies could also use the information from the EDR to determine whether you are a safe driver or not. Some insurers offer customers a type of EDR that monitors driving habits in an effort to encourage safer driving and offer the customers lower premiums, but these are optional. While users of these devices embrace the technology, others do not.

Loss of privacy vs. safety

Some people are concerned that the use of these devices will allow insurers and police to ‘spy’ on their driving habits in an effort to push up premiums and fines. People don’t want to give up privacy on the road, even if it could help manufacturers improve safety of future vehicles.

At the moment, there are no real regulations regarding black boxes, but it’s estimated that around 96% of all the new cars on the market contain the technology. Some manufacturers make it obvious that the boxes are being used, and others are a little less open about it. The federal government would like to see every new car equipped with the technology by the year 2014.

What does this mean for the average driver, and just how could it affect your premiums? Insurers are quick to point out that it doesn’t really have to mean anything at all. If you are already a safe driver, the technology backs that up and proves it to your insurer. Bad drivers would be ‘caught out’ and penalized, possibly before a major accident occurs. Fewer accidents and lower premiums are definitely good news for drivers everywhere.