Black boxes work by various means. Some are connected via the OBD port of the car and can monitor what is going in the car as a standalone unit. These have accelerometers in them, so can measure brake, steering and accelerative forces. From this, they can assess your driving style, which is transmitted via a sim card back to the provider. Using the sim, they can then triangulate where you are to work out what road you are on and what the speed limit is. These are not a great system, as if the phone loses a triangulation point, it makes it appear your car is going faster than it is, or the wrong location. Another type is the same as above, but with GPS reception. It again needs more than three satellites to get an accurate location. These are better but not infallible. Other types use a Bluetooth connection for a device permanently fitted to the vehicle, but connects to your phone and uses an app on your phone. This then uses the phone GPS data and map data. The danger of these types are when then continue reading data when your in someone else's car. They do have the benefit of vehicle tracking, so if the vehicle gets stolen, they can locate it.
What happens too, and for what purpose the data collected is used is what concerns me. GDPR places restrictions on how the data is used, and the fact someone knows where is also concerning. A client had a policy cancelled due to them advising they lived in Manchester as their home address (they did) but they were going to University in Liverpool and staying in the halls through the week. The insurer argued they lived in Liverpool. I managed to get the complaint overturned at the Financial Ombudsman, but the use of blackboxes can be both a positive and negative.