Car Insurance

AN electronic spy in your car could soon herald the era of pay- as-you-drive insurance.

Norwich Union is offering a new policy that will monitor the time, distance and sort of road their customers use.

A GPS device installed near the dashboard, which will cost about Pounds 50, will be needed to activate the service.

Norwich Union will then use the information to give an itemised monthly bill worked out by the mile . This could mean cheaper insurance for those who don’t use their cars a

lot. A policy for motorists aged 24 to 65 will will include costs of 1p a mile for off-peak motorway driving.

But 18 to 23-year-olds will be discouraged from night-time driving, with charges of Pounds 1 a mile during the high-risk accident time between 11pm and 6am.

Pay As You Drive insurance has been piloted by 5,000 motorists since 2004.

Norwich Union believes two-thirds of all

drivers and nine out of 10 low-mileage motorists would consider switching to the new system, which the firm claims is a first for Britain.

Norwich Union director Iain Napier said: “The launch of Pay As You Drive insurance will give motorists access to insurance that is tailored to them and their driving habits, potentially rewarding them with cheaper premiums.”