UK insurance giant Norwich Union has just launched a new Pay As You Drive car insurance service. When you sign up they install a GPS unit into your vehicle (Audi A8 excluded for some bizarre reason) which tells the company what journeys you do, and you then receive a monthly itemised bill for the insurance costs of each trip. You pay £50.00 for the GPS box, a flat monthly fee to cover fire and theft and then a charge for the journeys. They’ve priced it at between 7p a mile for urban journeys and 1p a mile for motorway, so it’s quite aggressively priced for those who don’t do commuter driving or only use their cars on the weekend. It’s a really superb idea and the surprise is that it’s arrived so soon, bearing in mind that GPS technology has only recently matured enough to be cost effective.
They’re also offering a special rate for young drivers which charges a premium if they drive at night (which apparently is a peak accident period – surprise) which they say should help reduce accidents for this susceptible demographic. The final icing on the cake are the additional high tech GPS options such as an ‘emergency button’ to summon help in times of breakdown, a theft retrieval service and the opt-in satellite navigation for an additional £1.00 a journey. I really like this idea of paying for what you use, and hope it succeeds big time. It’s interesting though that this is exactly the type of technology that the UK government will probably use to implement the road pricing tax, if they ever adopt the idea nationally. What a great way to encourage fast mass adoption, eh? Mmm…..