Car Insurance -
Insurance company stops pay as you drive - 15/06/2008
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One of Britain’s leading car insurers has now suspended its flagship car insurance offer two years after its creation.
The Norwich Union’s pay as you drive policy worked by using satellite technology to track every journey via the use of a black box that would be installed in the consumers car. This then resulted in cheaper premiums for those who would have avoided driving at high risk times such as rush hour and late at night. Reason for suspension was due to a lack of customers taking up the scheme and the slow take-up rate of the technology amongst car makers.
The insurance company had hoped that with the introduction of the scheme it would encourage drivers not to drive at rush hour and late at night in order to achieve lower premiums. Customers who were holders of the policy would have a black box fitted into their car which would feed back data of where the customer was and when they were driving.
This scheme was popular with younger drivers as they were charged at 5p per mile if they avoided the rush hour but at £1 if they drove at night.
Norwich Union had set a target joining of 100,000 drivers to the policy. But the company would not reveal how many people had signed up but said it was "not less than 10,000”.
The company have said they will be writing to their customers to inform them of the change. They say no one will be left without insurance, and that it will offer them a discount on its standard insurance policies. However many young people will be sad to see the demise of the policy.
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