A new pay as you drive insurance scheme for young drivers reduces crashes by 20 per cent
In-car GPS devices allow Norwich Union to build the insurance policy around each individual motorist. Customers will receive monthly bills based on car usage, including time of day, type of road, and mileage, another first in motor insurance. Bills will look similar to mobile phone bills, with the premiums for each journey calculated and totalled. This transparent approach to motor insurance will help customers control their motor insurance costs in a way that’s not been possible before now.
The new type of policy was developed directly as a result of the pilot data which showed that:
- Driving during a morning weekday rush hour is 50 per cent more likely to result in an accident than driving at weekends or in the evening
- Serious accidents are more likely to occur at night
- Motorway driving is up to 10 times safer than driving on low speed urban roads
Young drivers face high premiums due to the nature and frequency of accidents. Research by Norwich Union, the government and the ABI has shown that compared with other motorists, young drivers:
- Account for 45 per cent of fatalities on the road between 11pm and 6am
- Are 10 times more likely to have an accident at night and this rises to 14 times more likely on weekend nights
- Are 56 per cent more likely to suffer an injury between the hours of 1am and 5am
As a result, Norwich Union is launching “Pay As You Drive”™ insurance for young drivers, designed specifically for drivers aged 18–23, with many new benefits. This policy aims to reduce young drivers’ insurance premiums and the number of road accidents and casualties at night.
The “Pay As You Drive”™ insurance for Young Drivers pilot launched by Norwich Union in January 2005 saw the number of accidents among young drivers drop by a massive 20 per cent, proof that this type of insurance policy can actually save lives.
Norwich Union expects to reduce young drivers’ insurance premiums and the number of road accidents with the launch of “Pay As You Drive”™ insurance for young drivers.
Motorists can log on to www.payasyoudriveinsurance.co.uk and use the online calculator to find out how much they could save with “Pay As You Drive™” insurance.