Norwich Union launched pay-per-drive car insurance

Fri, 06 Oct 2006

UK motorists will now be able to pay car insurance premiums proportionate to their usage, as Norwich Union has launched a new Pay As You Drive car insurance policy.

The company claims that 67 per cent of all UK drivers would consider the option, while nine out of ten low-mileage motorists would switch to the new car insurance system.

Norwich Union has become the first car insurance provider to offer motorists a scheme which is directly linked to the usage of their vehicles.

Customers will receive a car insurance bill, rather than paying a premium, which will be based on overall usage, including mileage, time of day and the type of road which is used.

Itemised billing will also be available for policyholders who wish to view a breakdown of their car insurance costs.

Kay Martin, head of Pay As You Drive insurance, said: "Pay As You Drive insurance provides an innovative solution for young drivers while also appealing to a broad range of motorists who see the benefits of paying for insurance based on actual vehicle usage."

However, a recent study by Moneysupermarket.com revealed that cuts of 40 per cent to car insurance premiums would inspire less that ten per cent of drivers to switch to this system.


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