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Norwich Union positive about pay as you go car insurance

06 May 2005
An innovative new pay as you go car insurance policy is performing well in trials by Norwich Union.

The insurer's two-year study is implementing the pay as you go model, which uses a Global Positioning Satellite (GPS) device to keep track of trips made by drivers.

Information about the actual distance travelled is then transmitted directly to the insurer and the motorist is charged for their insurance premium accordingly.

The pay as you go system was found to provide significant benefits for certain types of customer.

Motorists who do not use their car very often could find significant reductions with this type of policy, and young drivers aged 18 to 21 could also benefit as they are usually charged high premiums for short, low risk journeys.

The Norwich Union trial follows an extensive test of the same system by US insurer Progressive Insurance, but no UK insurer has yet confirmed that the pay as you go policy will be launched over here.

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