Post by shoreman on Oct 6, 2006 10:48:45 GMT -5
"Pay as you drive" insurance hits roads
Thu Oct 5, 2006 12:49 AM BST
By Jennifer Hill
today.reuters.co.uk/news/articlenews.aspx?type=topNews&storyid=2006-10-04T234927Z_01_L04617297_RTRUKOC_0_UK-FINANCIAL-CAR-INSURANCE.xml&rpc=92
LONDON (Reuters) - The "pay as you go" concept is nothing new: from mobile phones to utility bills, consumers are able to pay for goods and services at the point of consumption.
Now, Britain's first "pay as you drive" car insurance policy has taken to the road.
The cost of the motor cover, from Norwich Union, will vary depending on when, where and how often motorists use their cars, determined by data from in-car global positioning system devices.
Customers will receive regular bills based on car usage, including the time of day journeys are made, the type of roads driven on and the mileage clocked up in the process.
Itemised bills -- like those in the mobile phone industry -- will detail the premiums charged for each journey, and the monthly total.
The usage-based car insurance, which will cost from a penny per mile, has been designed to help drivers control insurance costs and could save some up to a third on their current premiums, according to Norwich Union.
Iain Napier, director of "pay as you drive" insurance, said the cover would give motorists access to cover tailored to them and their driving habits -- and could reward them with cheaper premiums.
"We're confident that 'pay as you drive' insurance is simply a fairer way of calculating premiums and gives customers greater control, flexibility and choice," he said.
Norwich Union unveiled the cover on Thursday following a pilot of 5,000 motorists. It has been trialling the "pay as you drive" insurance since 2004.
Charges will take into account the prevalence of accidents at various times or day and on particular roads.
Driving during a morning weekday rush hour is 50 percent more likely to result in an accident than driving at weekends or in the evening, while serious accidents are more likely to occur at night, according to data from Norwich Union and the Department for Transport.
Motorway driving, meanwhile, is up to 10 times safer than driving on low-speed urban roads.
The new insurance will cost from 1p per mile for off-peak motorway driving and from 4p per mile for off-peak urban driving.
Norwich Union has also launched a "pay as you drive" policy specifically for young drivers.
Those aged 18 to 23 will be charged lower premiums if they stay off the roads at night.
The cover will cost one pound per mile for journeys made during the hours of 11pm and 6am, but as little as 5p per mile for off-peak travel. Young motorists will also receive 100 or more "free" off-peak miles per month.
Young drivers account for 45 percent of fatalities on the road between 11pm and 6am and are 10 times more likely to have an accident at night, rising to 14 times more likely on weekend nights, according to industry statistics.
Kay Martin, head of the new insurance at Norwich Union, said the policy provided an "innovative solution" for young drivers.
"The future of insurance is tailored products to suit people's lifestyle and the launch of 'pay as you drive' insurance is the first step in this direction," she added.
Thu Oct 5, 2006 12:49 AM BST
By Jennifer Hill
today.reuters.co.uk/news/articlenews.aspx?type=topNews&storyid=2006-10-04T234927Z_01_L04617297_RTRUKOC_0_UK-FINANCIAL-CAR-INSURANCE.xml&rpc=92
LONDON (Reuters) - The "pay as you go" concept is nothing new: from mobile phones to utility bills, consumers are able to pay for goods and services at the point of consumption.
Now, Britain's first "pay as you drive" car insurance policy has taken to the road.
The cost of the motor cover, from Norwich Union, will vary depending on when, where and how often motorists use their cars, determined by data from in-car global positioning system devices.
Customers will receive regular bills based on car usage, including the time of day journeys are made, the type of roads driven on and the mileage clocked up in the process.
Itemised bills -- like those in the mobile phone industry -- will detail the premiums charged for each journey, and the monthly total.
The usage-based car insurance, which will cost from a penny per mile, has been designed to help drivers control insurance costs and could save some up to a third on their current premiums, according to Norwich Union.
Iain Napier, director of "pay as you drive" insurance, said the cover would give motorists access to cover tailored to them and their driving habits -- and could reward them with cheaper premiums.
"We're confident that 'pay as you drive' insurance is simply a fairer way of calculating premiums and gives customers greater control, flexibility and choice," he said.
Norwich Union unveiled the cover on Thursday following a pilot of 5,000 motorists. It has been trialling the "pay as you drive" insurance since 2004.
Charges will take into account the prevalence of accidents at various times or day and on particular roads.
Driving during a morning weekday rush hour is 50 percent more likely to result in an accident than driving at weekends or in the evening, while serious accidents are more likely to occur at night, according to data from Norwich Union and the Department for Transport.
Motorway driving, meanwhile, is up to 10 times safer than driving on low-speed urban roads.
The new insurance will cost from 1p per mile for off-peak motorway driving and from 4p per mile for off-peak urban driving.
Norwich Union has also launched a "pay as you drive" policy specifically for young drivers.
Those aged 18 to 23 will be charged lower premiums if they stay off the roads at night.
The cover will cost one pound per mile for journeys made during the hours of 11pm and 6am, but as little as 5p per mile for off-peak travel. Young motorists will also receive 100 or more "free" off-peak miles per month.
Young drivers account for 45 percent of fatalities on the road between 11pm and 6am and are 10 times more likely to have an accident at night, rising to 14 times more likely on weekend nights, according to industry statistics.
Kay Martin, head of the new insurance at Norwich Union, said the policy provided an "innovative solution" for young drivers.
"The future of insurance is tailored products to suit people's lifestyle and the launch of 'pay as you drive' insurance is the first step in this direction," she added.
