Norwich Union Launches "Pay-as-You-Drive" Policies for Young Drivers

Norwich Union, the UK's largest insurance company, has announced a new initiative aimed at alleviating the financial burden on young drivers aged 18-21. The company is launching a "pay-as-you-drive" policy that uses global positioning satellite "black boxes" to monitor insured drivers' cars and calculate premiums based on mileage driven. This scheme is designed to discourage young drivers from using their vehicles between 11pm and 6am, a time period identified as particularly hazardous by the recent Greenaway report on uninsured driving.

Key Takeaways:

• Norwich Union's new policy will charge drivers based on mileage driven, with the aim of reducing premiums for young drivers by up to 30% per year.
• The policy requires the installation of global positioning satellite "black boxes" in insured drivers' cars, which will monitor their driving habits and calculate premiums accordingly.
• The scheme partners with Ohio-based Progressive, IBM, and mobile phone group Orange to operate.
• Drivers can save money by driving during off-peak hours, which are considered safer.
• Robert Ledger, Norwich Union's programme director for the scheme, estimates that for most drivers, the savings from the policy would more than cover the £199 installation charge for the black boxes.

Statistics:

• Up to 30% per year savings on premiums for young drivers who take full advantage of the policy's provisions.
• £1,000 annual premiums for some young drivers, even on low-powered small hatchbacks.
• £199 one-off charge for installing global positioning satellite "black boxes" in insured drivers' cars.
• £199 installation charge is deemed to be more than covered by the savings for most drivers.

Sources:

• Greenaway report into uninsured driving.
• Robert Ledger, Norwich Union's programme director for the scheme.
• Norwich Union press release.
• "pay-as-you-drive" policy launch statement.