Car insurer road tests 'pay as you go' driver monitor

Hundreds of motorists are road-testing new monitoring technology which could mean smaller insurance premiums for security-minded people who drive fewer miles.

Up to 5,000 Norwich Union customers across the UK have had 'Black box' telematics devices fitted into their cars which can monitor driver habits on when, where and how often a vehicle is used.

The trial is designed to allow motorists to understand their premiums better – and so allow them to have greater control and to adjust their driving patterns to reduce their motoring costs.

The black box is smaller in size than a DVD case and is installed either in the boot or passenger area of a customer’s car. The box records real-time vehicle usage and sends the data to Norwich Union securely using similar technology to that used by mobile phones.

The pilot will last for up to two years and once the findings are evaluated, Norwich Union will confirm whether 'Pay As You Drive' (PAYD) insurance will become available to all customers.

Linda Jones, one of the first volunteers to have her car fitted, said: "The PAYD pilot grabbed my attention as it seemed a much fairer way of charging for car insurance. It doesn’t penalise me for how other motorists drive and it’s also more transparent. I like the fact that in time I’ll receive a monthly bill, similar to my phone bill showing exactly how my premium has been calculated."

Norwich Union’s telematics device has the ability to locate a vehicle in the event of theft and in future will provide instant notification of accidents to the insurer. Future enhancements such as panic buttons and real-time route planning could also feature in the longer term.

Robert Ledger, programme director for the scheme, said: "We believe this initiative is a major breakthrough in the development of more tailored motor insurance premiums enabling us to treat all drivers as individuals. And we’re confident our customers will fully appreciate the benefits too."

(gmcg)