Car insurance news

Norwich Union announce – ‘Pay as you drive’ insurance

Norwich Union are launching a new car insurance policy that can potentially save young motorists 25% on premiums by taking out Pay As You Drive car insurance. The new car insurance product is targeted at drivers aged 18 to 21 and utilises cutting-edge, in-car technology to work out premiums based on when and how often they drive.

Journeys made between the "peak" hours of 23:00 to 06:00 are charged more, and motorists who make more journeys in this time receive a higher monthly premium.

“Government statistics show that this age group [18-21] is more likely to be killed or injured in road accidents between the hours of 23:00 and 06:00 - and this has been factored into tariffs for this product," said Robert Ledger, programme director for the Norwich Union, Pay As You Drive car insurance scheme.

Norwich Union points out that along with reducing car insurance premiums for the 18-21 age bracket, Pay As You Drive also encourages this age group from driving at night when the conditions are less safe.

The technology is based on a 'black box' style device, which tracks the car using a global positioning satellite. The information on where and when the car has been driven is transmitted to Norwich Union car insurance over a mobile phone network.

Along with the differing charges for 'peak' and 'off-peak' travel, Pay As You Drive car insurance also offers a tariff per mile, with the rate personalised to each customer and dependent on the time of day the car is driven, the deal also includes 100 free off-peak miles a month. There is an initial charge of £199 for the 'black box', but this is expected to cost less than the savings that can be made in premiums.

An added benefit of the system, is that the box has a built-in car locator - letting customers find their car in the case of an accident, breakdown or if it has been stolen.

The Pay As You Drive car insurance scheme is currently being trialled in a number of areas, if successful Norwich Union plan to roll out the system across the country.

Source – Norwich Union

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