Insurance World

Pay as you drive car insurance from Norwich Union
05 October 2006

Norwich Union Direct the UK’s largest motor insurance provider as announced it’s new innovative “Pay As You Drive” cover, offering motorists the ability to reduce their insurance premiums.

Offering two new policies , the basis of which are usage-based insurance premiums, Norwich Union is finally offering cover after its initial pilot scheme, involving 5,000 motorists, was launched in 2004.

Norwich Union’s researched showed that over two thirds of the UK motorists are likely to welcome the initiative by which average savings are expected to be around 33%.

With the use of in-car GPS monitoring devices the UK’s largest car insurance provider is able to tailor make unique car insurance policies specific to the policy holder - premiums being based on usage.A completely transparent itemised billing system should allow drivers to finely tune there policies, yet remaining flexible.

Premiums will be based not merely on mileage but also on other factors such as when,where and how often the policy holder drives. Premiums can even be identified to each journey.

Offering two distinct policies: 18-23 and 24-65 year old drivers Norwich Union is efficiently using its huge databank of claims histories to pass on potential savings to the more discerned driver.

Using a combination of Norwich Unions own data together with statistics supplied by ABI and the department of Transport the pilot scheme revealed :-

18-24 year old drivers are at great risk during the early hours with this group accounting for 46% of fatalities on the road between 11pm and 6am, and are 56% more likely to suffer injury between 1am and 5am.
This group is 10 times more likely to have an accident at night and this rises to 14 times more likely on weekend nights.
Premiums will reflect these high risk periods and it is hoped will encourage young drivers to refrain from driving during these periods.The pilot scheme revealed a 20% drop in accidents involving young drivers and strenghtens the belief this type of policy will save lives. Norwich Union is hoping the introduction of this scheme will dramatically reduce the number of accidents involving young drivers.

In the other group - the 24-65 year old drivers, the pilot revealed that this group was 50% more likely to suffer an accident during the morning weekday rush hour than driving at weekends or in the evenings. Serious accidents are most likely to happen at night and that motorway driving was up to 10 times safer than low speed urban roads.
These statistics are encouraging to the 48% of Norwich Union customers who dont use their vehicle to drive to work during the weekeday peak periods.

Iain Napier, director of “Pay As You Drive”™ insurance, said: “The launch of “Pay As You Drive”™ insurance will give motorists access to insurance that’s specifically tailored to them and their driving habits, potentially rewarding 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. That’s why we expect the first ever “Pay As You Drive”™ insurance proposition in the UK to be a huge success with motorists.”

Kay Martin, head of “Pay As You Drive”™ insurance, added: ““Pay As You Drive”™ insurance provides an innovative solution for young drivers while also appealing to a broad range of motorists who see the benefits of paying for insurance based on actual vehicle usage. 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.”

Overall it is likely this type of policy will be well received by UK motorists, especially in view of the transparent billing system, enabling policy holders to make informed decisions as to how and when to use their vehicles.

Choosing the right auto insurance company is very important since they will be the one to help you settle any auto related mishaps in the future. Auto insurance companies follow a basic set of benefits which they provide their policyholders. They only differ in the premiums. There are auto insurance companies that offer exorbitant insurance premiums and there are also those that offer affordable premiums. But just how can you know that the auto insurance company you have chosen is a reliable company?

A reliable auto insurance company is one that has a good reputation of paying or settling claims in the fastest time possible and pays the correct amount of claims. To check on your chosen auto insurance company you may visit your state’s department of insurance web site. You may not be aware of this but every state has its own department of insurance. Nowadays, most of these departments have their own web sites which display consumer complaint ratios of all insurance companies that sell in their state. These ratios will tell you just how many complaints each of the listed car insurance received per one thousand claims filed.

The complaint ratio will provide you with a gauge on which car insurance to choose. Likewise, out of the list of your chosen car insurance you may be able to also get the company that offers the lowest premium quotes. But make sure that your chosen car insurance company has one of the least ratios of complaint. The car insurance that ranks on both lists should merit your strongest consideration.

The next step is to find out which body shops are recommended by your chosen car insurance. Take note of the locations of their accredited body shops. See if there is an accredited shop that is in your area. If they have one in your area so much the better but you still have to check on the auto body shop to see if it has all the necessary auto repair equipment and machines that can effectively answer any auto repair that you may be requiring in the future.

After checking on the auto body shop and you need to ask them about the insurance company that accredits them. They will either give you a positive feedback or a negative one. Lucky for you if it’s a positive remark since this will mean that you have finally found the auto insurance that you want. However it is not yet the end of your search since there are still other factors you have to look into.

Additional information on the auto insurance company that you are considering may be found on the J.D. Power and Associates website. This organization is known to collect data from individual policyholders nationwide and asks these same policyholders to rate their auto insurance company according to coverage options, price, claims handling, satisfaction with representatives, including the overall experience that they have with their respective auto insurance companies.

Another factor for you to look into before you finally settle and pay your very first premium is the financial strength rating of the auto insurance company that you are considering. You may take a look at the A.M. Best and the Standard & Poor’s ratings. These two companies are known for publishing financial strength ratings of all insurance companies. The financial strength of an auto insurance company will determine its capacity to pay or to settle claims. Auto insurance companies that reflect a very low financial strength ratio would mean they do not have the capabilities of settling claims and therefore should not be chosen.