UK and European motorists will find their motor insurance calculated according to how often they take to the road under proposals for a new 'pay as you drive' technology pilot from Norwich Union.
Under an agreement signed with US insurer Progressive, Norwich Union will be able to collect real-time vehicle data using a 'black-box' device installed in customers' vehicles. This will allow monthly insurance payments to be calculated based on how often, when and where a customer's vehicle is actually used.
The device measures vehicle usage and sends data directly to Norwich Union using similar technology to that used by mobile phones. Customers could be billed monthly and the technology will also allow the insurer to offer complementary in-car services, such as emergency assistance and real-time route planning, says the insurance company.
Research commissioned by Norwich Union shows that nine in ten motorists say they would prefer their motor insurance to reflect the usage of their car and the type of journeys they make - with the majority favouring pay as you go systems similar to those offered by gas and electricity suppliers.
Robert Ledger, programme director for Norwich Union, says: "Motorists would receive a fairer deal as this initiative provides them with the opportunity to really be in the driving seat when it comes to controlling their premiums."
Following an extensive consultation period 5000 motorists will be recruited later this year to test customer benefits of the pay as you drive insurance and demand for associated services.
Customers can register their interest in Norwich Union 'Pay As You Drive' insurance by emailing their contact details to payasyoudrive@norwich- union.co.uk.