Pay As You Drive- Will It Work

Category: Finance, Insurance.

Pay As You Drive- Will It Work.

Having been an insurance broker for over 30 years, one thing that has always been noticeable is that Norwich Union have always been at the forefront with new ideas but will their latest project" Pay As You Drive Insurance" be a blessing or a disaster for motorists. Pay As You Drive- Will It Work. As of today Norwich Union are offereing motorists a pay as you drive insurance scheme. It will know the roads you drive on, when you drive, speed you do, when you go to the toilet( only joking on that one by the way) etc etc. Your car will be fitted with a black box type recorder which will record your every move. In theory this sounds like a good idea because why should the little old lady who uses her car once a fortnight pay the same as a person who uses their car every day and in theory is therefore more liable to have an accident.

They say that drivers who drive a lot at night will pay more than ones who drive mainly by day. However is is NOT NEEDED because companies ALREADY give discounts to low mileage drivers, which to me is the same. That really surprises me as there is bound to be a lot less traffic at night so I would have thought that the chances of an accident are far less. Maybe they are seeing claims from drunk drivers so maybe it is time for insurers and ministers to get together and agree not to pay claims for customers who have accidents and then fail the breathalyser. As brokers I know that we get far more accidents during the day than at night. In practice it is probably not legally possible but something certainly needs to be done to tighten up on this problem of drunks and hell drivers costing us all money.

If you look at motorway accidents and the number of vehicles involved plus the extra speed, I just cannot understand how they say it is far safer driving on a motorway than for example an A road in the country. The other thing that amazed me was that they say that motorway driving is far safer than say in the country. My own opinion is that this Norwich Union scheme will die on its feet within a year but I may be wrong and it may be the most popular thing they have done( after all most motorists like gadgets) . If you happen to be a 22 year old courier who drives mainly through the night on country roads, I would suggest that the" Insurance Black Box" is not for you. Normally other insurers follow Norwich Union s lead but I don t think they will on this one. HOWEVER if you are the type of person who drives to the shops one a fortnight and doesn t mind Norwich Union watching your every move then it could be right up your street. All insurers already offer discounts for mileage restrictions, postcodes( ie in the middle of a city is dearer than for example the middle of Dartmoor) as well as driving restrictions which should drastically lower your premiums without resorting to a black box watching your every move.

My feeling is that it is not necessary.