What happens if I go over my mileage with black box insurance?
When you take out a black box car insurance policy, you will have to give an estimate of your annual mileage, just like you would with standard car insurance. However, all your driving is recorded with a black box, so your insurance company will know instantly if you exceed your pre-agreed mileage. But what happens then?
Exceeding your mileage with a black box insurance policy doesn’t mean you’ll be prohibited from driving or fined. Instead, you may simply have to pay more.
With any car insurance policy, you’re required to submit an estimate of your annual mileage at the outset. That mileage is one factor in the complex calculations insurers use to set your premiums. Less time on the road and you’ll pay lower premiums, while those who put more miles on their odometer will pay more.
However, your estimate might turn out to be wrong: a new job with a longer commute or unexpected cross-country trips can easily push you above your predicted mileage. Insurers will give you a little wiggle room, but if you go wildly over your estimated mileage, you should notify your insurer and have them update your mileage. They may then charge you a lump sum to cover the additional mileage. Failing to alert them if you far exceed your mileage is grounds for them to cancel your insurance policy and reject your claims.
However, with a standard car insurance policy, your mileage will likely only be detected if you submit a claim, at your next renewal, or from your MOT history. But with black box insurance policies, mileage is one of the metrics measured by the telematics device and communicated to your insurer. Therefore insurers can see if you’ve already overshot your estimated annual mileage or are on track to do.
However, they don’t use that information to fine you or ban you from driving. Contrary to some internet rumours, black box insurance policies don’t impose a cap on your mileage. Instead, insurers will use data about your driving to update your annual mileage, which may push up your premiums. Conversely, if your black box reveals you’re driving less than you predicted, the insurance company may discount your premiums.
Some black box insurance policies operate on a pay-as-you-go basis, with you monitoring your mileage and topping up your policy with additional mileage, much as you would top up a PAYG phone.