"Pay as you drive" insurance hits roads

[zzyzzx]

Anyone else not liking this idea?

"Pay as you drive" insurance hits roads

LONDON (Reuters) - The "pay as you go" concept is nothing new: from mobile phones to utility bills, consumers are able to pay for goods and services at the point of consumption.

Now, Britain's first "pay as you drive" car insurance policy has taken to the road.

The cost of the motor cover, from Norwich Union, will vary depending on when, where and how often motorists use their cars, determined by data from in-car global positioning system devices.


Customers will receive regular bills based on car usage, including the time of day journeys are made, the type of roads driven on and the mileage clocked up in the process.

Itemised bills -- like those in the mobile phone industry -- will detail the premiums charged for each journey, and the monthly total.

The usage-based car insurance, which will cost from a penny per mile, has been designed to help drivers control insurance costs and could save some up to a third on their current premiums, according to Norwich Union.

Iain Napier, director of "pay as you drive" insurance, said the cover would give motorists access to cover tailored to them and their driving habits -- and could reward them with cheaper premiums.

"We're confident that 'pay as you drive' insurance is simply a fairer way of calculating premiums and gives customers greater control, flexibility and choice," he said


Norwich Union unveiled the cover on Thursday following a pilot of 5,000 motorists. It has been trialling the "pay as you drive" insurance since 2004.

Charges will take into account the prevalence of accidents at various times or day and on particular roads.

Driving during a morning weekday rush hour is 50 percent more likely to result in an accident than driving at weekends or in the evening, while serious accidents are more likely to occur at night, according to data from Norwich Union and the Department for Transport.

Motorway driving, meanwhile, is up to 10 times safer than driving on low-speed urban roads.


The new insurance will cost from 1p per mile for off-peak motorway driving and from 4p per mile for off-peak urban driving.

Norwich Union has also launched a "pay as you drive" policy specifically for young drivers.

Those aged 18 to 23 will be charged lower premiums if they stay off the roads at night.

The cover will cost one pound per mile for journeys made during the hours of 11pm and 6am, but as little as 5p per mile for off-peak travel. Young motorists will also receive 100 or more "free" off-peak miles per month.

Young drivers account for 45 percent of fatalities on the road between 11pm and 6am and are 10 times more likely to have an accident at night, rising to 14 times more likely on weekend nights, according to industry statistics.

Kay Martin, head of the new insurance at Norwich Union, said the policy provided an "innovative solution" for young drivers.

"The future of insurance is tailored products to suit people's lifestyle and the launch of 'pay as you drive' insurance is the first step in this direction," she added.

[RottenFoxBreath]

well there pricing is way off..the bbc are reporting £1 at night,and 5p all other times..and there not the only ones.

[lordsmurf]

I would probably save shitloads of money if this was in the USA. I'm not on the road all that much.

[thecoalman]

Itemised bills -- like those in the mobile phone industry -- will detail the premiums charged for each journey, and the monthly total.

Bad roads $10.00
The other road: $20.00
Moved car across street (gotta be a base charge for starting it): $28.00
GPS Surcharge: $6.00
Other surcharge: $4.00
Service Charge: $8.00
The "bbjkdbkjdtfd" Charge: $2.00
Final stick it in in your ass charge just cause we can: $10.00

[hudsonf]

Sounds to me like a way for them to make more money from their customers. A driver that goes the same amount of miles during rush hours without a incident will have to pay more than a driver going the same amount of miles without a incident during off peak hours. I don't see the fairness in this at all.

[gadgetguy]

The concept is that during rush hour the risk is greater so the premium is greater. Insurance is all about risk management. Insurance companies sell you a policy with the hope of never having to pay a claim. In the greater picture, the odds are in their favor from the start considering the sheer number of drivers on the road compared to the number of accidents. Some individuals have proven to be a greater risk than others and they're allowed to charge them more (high risk). Some statistical groups also constitute a greater risk even though individuals within that group may be extremely low risk, and they get to charge more for them too. However, they still want to limit the risk so they offer incentives to drivers to adopt behavior patterns that reduce the risk even further. This is just another method of behavior modification.
The thing that I think is wrong with this is that people that drive for a living will pay an enormous amount because they are on the road more, but they tend to be better drivers who are more aware of their surroundings and are actually a lower risk than those that only drive to and from work following the same route every day. Regardless of the time of day the latter tend to put the car in "autodrive" and are less aware of what's going on around them.

[Super Warrior]

Sounds like a scam.

[lordsmurf]

because they are on the road more, but they tend to be better drivers who are more aware of their surroundings and are actually a lower risk.

This is not true. It seems like it would make sense, but the logic is flawed. I've actually seen this before.

[gadgetguy]

The logic is not flawed regardless of your anecdotal evidence. My insurance man told me there is study data to support this. The study was specific to people that do not drive the same route every day. This means it excluded professional drivers that just deliver goods back and forth to the same 2 locations, but focused on cross-country, outside sales, and service people that were constantly going to new locations and it showed that there were far fewer accidents than those that always drove familiar routes.

[lordsmurf]

It's an urban myth, like many others, and based off faulty logic to boot. You might want to look around for a better insurance man.

The inverse is actually the truth. Frequent drivers get lulled into an easier sense of safety and security. The frequent drivers are the ones that get into the most accidents, and it's not at all related to them simply being on the road more.

[gadgetguy]

My opinion is based on information provided by a man who works in the industry that I've known and trusted for over 20 years and claimed case study information. Why should I accept the unsubstantiated opinion from someone on the internet, and that I've never met personally, that it's an urban myth based on faulty logic without even explaining the fault.
The study showed it's not the frequent driving that lulls them into a easier sense of security, it's the familiar path that does it.

[thecoalman]

Sorry LS, from personal experience I can tell you otherwise. Being in the trucking industry I know many drivers with many miles under there belt and very few have caused accidents. They wouldn't get or keep those jobs if it was otherwise. I myself have half a million or better in trucks alone and have never had an accident of any consequence. Biggesdt accident I was in was caused by someone else and was quite minor.

[lordsmurf]

Ah, but you see coalman, truckers are not common drivers at large. Neither are motorcyclists or race car drivers. They are more aware because of their job or other specific reasons. A lot of that is firmly ground into them during the education process, unlike normal driving education.

Gadgetguy, I originally missed the part where you said the drivers do not take the same path. Those who constantly travel new routes are better than those that drive the same route daily, excluding couriers. Although being lost can contribute to their accidents.

So we were saying the same thing after all, I guess.

[zzyzzx]

Sounds to me like a way for them to make more money from their customers. A driver that goes the same amount of miles during rush hours without a incident will have to pay more than a driver going the same amount of miles without a incident during off peak hours. I don't see the fairness in this at all.

I would disconnect the GPS, or at least put the power through a switch so I could keep it off during rush hour, etc. The though of installing in on my rooftop or bicycle instead would be rather tempting too.

[gadgetguy]

I would disconnect the GPS, or at least put the power through a switch so I could keep it off during rush hour, etc. The though of installing in on my rooftop or bicycle instead would be rather tempting too.

Hmmm, would that would be considered insurance fraud?


@LS We weren't exactly saying the same thing, but we definately aren't as far apart as it seemed.

[FulciLives]

They want to charge more for "rush hour" driving because it is a high risk time?

Oh please.

It's f'ing typical.

They make us slaves and then make us pay for it.

Excuse me ... I drive at rush hour because I have a f'ing job which I need to "survive" in this f'ed up thing called society and now I have to "pay" to be your f'ing slave!

**** it.

I need to find me a cabin in the middle of the woods of nowhere (but one with electricity and some sort of satellite TV and internet connection of course). heh.

- John "FulciLives" Coleman

[zzyzzx]

The whole things comes across as rather big brother-ish, which is why I'd want to disable the GPS.