Pay as you drive car insurance is on the way

Thu, 22 Sep 2005

Norwich Union has announced a new type of car insurance, pay as you drive. This will revolutionise car insurance if the current pilot scheme is successful.

Doug Vallgren, marketing manager for Norwich Union’s pay as you drive scheme made the announcement earlier this week to Norfolk Chamber of Commerce.

The pilot scheme is using customer’s cars that have been fitted with black boxes, 5000 in total. The black boxes monitor how frequently the cars are being used as well as when and where.

The aim of the project and the new technology is that Norwich Union will be able to provide motor insurance that is tailor made for its customers. The premiums will be based on a risk assessment of the driver’s own circumstances. It hoped that young drivers will benefit with affordable premiums. Drivers aged between 18 – 21 years will have the ability to control their driving patterns by driving during 6am and 11pm and avoiding the peak times of 11 pm and 6 am leading to a reduced premium.

The time of day is considered as statistics show the majority of people in the 18 – 21 age group are more at risk of being injured between the hours of 11 pm and 6 am.

Mr Vallgren said during his announcement that Pay As You Drive is in the last six months of research and development and was confident the pilot scheme would be successful. He added that the product had "a very strong future".

"It will launch our company into a new area and for the customer it is a fairer deal that gives them more control and greater choice," he said.

"We have spent three and a half years working on this. We've still got some time to think about how and when we will roll it out but it will be good for Norfolk and the community when it happens."

Mr Vallgren said the company would like to work with local businesses to establish Norwich as the experts in the new telematics technology. "We are pleased that this knowledge will make us the shop window for Europe."
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