The average car insurance policy for a young driver between the age of 17 and 19 is over £1,500 making it the most expensive insurance for any age group.

Worse for newly qualified drivers, young driver insurance was the only age range to actually see a rise in insurance costs between 2010 and 2012, according to data from MoneySupermarket.

The reason young drivers are hit with higher insurance costs is because they are seen as more of a liability and statistics show younger and newly qualified drivers are more likely to be involved in accidents in the months after passing their test.

As a result a new paper being put forward by the government is expected to introduce new rules for younger drivers that could include motorway driving training, a phased licensing period in the 12 months after a test is passed and even specified times a new driver can get behind the wheel.

However, youngsters who do wish to get behind the wheel and are facing massive insurance costs could have a way of reducing that cost - and it is becoming increasingly popular across the UK.

Telematics car insurance

Telematics is a new form of car insurance but it is estimated 20 per cent of younger drivers could be using the method by 2020.

Telematics is sometimes known as black box recording and it is this name that gives a hint about what the scheme actually does.

The term black box is usually associated with air travel. A black box on an aeroplane is designed to record audio and system data from the cockpit so that if there is an accident and the aircraft crashes or is damaged, the data can be used to find the problem that caused it.

Black boxes in cars are slightly different although they are designed to record data such as how quickly a driver brakes, acceleration, cornering and speed. Like an aeroplane black box it records this data and puts it into reports.

The reports generated by the black box can be used to inform the insurance company of how safe the driver is - and if the data shows the driver is safe the insurance company can reduce the cost of an insurance policy.

The safer a driver is, the less insurance will cost. The telematics insurance solution rewards good driving and allows drivers to prove they are safe regardless of age or experience.

Telematics insurance became a popular phenomenon in the US before it was introduced to the UK and early take-up has been quick with younger drivers seeking to reduce their insurance premium.

However, it is not just younger and newly qualified drivers who can benefit from telematics insurance. Drivers who have had a driving conviction will often find extremely high insurance premiums and a black box system allows them to prove they are safer drivers and thus eligible for lower insurance costs.

Benefits of telematics insurance

The major benefit of telematics insurance, as explained above, is the ability to lower quoted premiums through demonstrating safe driving techniques.

However, it could also be the case telematics insurance can actively affect drivers and make them safer drivers. If a driver knows breaking the laws of the road or driving in an unsafe manner will cost them money on insurance costs they will be more likely to drive safely.

Similarly if a driver sees a report showing acceleration, speed and all other aspects of driving it may help them to identify where their driving could be unsafe and help them to correct their driving technique.

Reports from telematics devices are generally used by the insurance company but drivers can request the reports if they wish.

Early statistics from the UK show simply having a black box device in a car is enough to make a driver safer because of the reasons outlined above, meaning black box insurance does not just benefit drivers but also other drivers and pedestrians.

Cons of telematics

Telematics car insurance many not be for everybody. For example, drivers who are unsafe could see insurance premiums rise if the black box reveals their driving habits. However most will argue unsafe drivers deserve higher insurance premiums because of the risk they pose to themselves and others.

Other drivers may be nervous about 'big brother' watching their driving habits but once again, this should only really apply to those who have bad driving habits.

Telematics insurance is available across the UK from many of the major insurance companies. Not just for young drivers or those with convictions, telematics could be the answer to anybody who feels their insurance premium is a little too high.