Norwich Union launch Pay as you Drive Insurance

[Satch]

http://news.bbc.co.uk/1/hi/business/4167347.stm

Hmmm. Thin end of the wedge: Road Pricing & Speed Control next

 

[pammy]

mmm - I had heard they were running the pilot - but now to launch it.

Not sure what I think really. Initial thoughts are you pay the relative insurance for the amount of driving that you do. But £1 per mile for the peak rate - that's extortion. What if you work like I do - 17 miles away from home -and your job has hours that means you are on the road for work during peak time. £17 to get to and/or from work.

6p per mile during the safe time seems much more like it, but I notice it's "from" 6p. Be interesting to see the pricing bands. From what I see of many "young" drivers - they're just as capable of driving like eejits at these safe times as they are the peak time.

Like many things - principle seems OK - it's going to be the practical application that will see it work well for some - but not for others.

And as daughter dear gets nearer and nearer to age 17 it's something I have a keen interest in

 

[Satch]

Not clear to me how it copes with different drivers. I would consider it if could just do paygo insurance for No 1 son as he will be driving next year and would be a very infrequent off peak driver.

I would leave my existing policy in place to cover self & wife

 

[Shude]

What if you work like I do - 17 miles away from home -and your job has hours that means you are on the road for work during peak time. £17 to get to and/or from work.

I work 40 miles from home. That'd come to a big ol' bill at the end of the month, possibly rivalling some teenage mobile phone pay-as-you-go bills! Maybe not...

I see it uses that perfect system "GPS", with no known faults ever and no possible way to block the signals!

 

[Swiss Toni]

Sounds like a good idea.

So when young lad gets stopped at 2am, how will he be able to prove that he has valid insurance within the 7 days that the Cops allow?

If NU charge even a small fee to send out a cert that shows he paid up (and they do that straight away), then there is a cost to getting -ahem- "pulled by the rozzers" (ouch).

And if I put my Burburry cap (mines a flat grandad stylee, but I could get a baseball chavstyle one I guess) on backwards - can I try it too?

 

[Swiss Toni]

I work 40 miles from home. That'd come to a big ol' bill at the end of the month, possibly rivalling some teenage mobile phone pay-as-you-go bills! Maybe not...

I see it uses that perfect system "GPS", with no known faults ever and no possible way to block the signals!

So you fall in the 17 to 21 bracket?

 

[garystu1965]

The Police do a similar scheme. It's called "Pay As You Speed". Works out at about £10 a mile over the speed limit and 1 point per ten mph over.
If your name is Beckham though it doesn't count. (very cynical I know).

 

[Mr E]

Company I work for has developed this for NU - had an interesting thread and discussion with glojo (john) a while back. Perhaps you can draw a conclusion about the consultancy.......

Seriously though - the principle is based on sound actuarial principals. The problem is that the nutters who casue most of the problems aren't insured anyway, so you can't save money on that.....

You get a certificate as per normal, but when you don't pay the cover gets withdrawn (like now if you opt for a pay-monthly scheme). Police can then check this fairly easily.

The demos are fairly impressive - the kit costs way more than £199 and the accuracy is astounding, For example, it would be possible to deduce the speed of travel at the time of an accident.

The idea is to cut down losses on the money paid out by either charging more for actuarially-based risky times and/or using the data to challenge claims.

This will be fairly unsophisticated and time-based at the moment, but expect more sophisticated and, potentially, cheaper policies based round this too.

 

[BenzComander]

Sorry to be sceptical, but major businesses do this sort of thing for one reason, and one reason only: to make money

Nobody at Norwich union sat there and said "how can we save our customers money?" More like "how can we change the current system so we can look like we are trying to save customers money?"

Most of us will probably not see any saving from such a scheme.

Rant over, putting soap box away and going back to work....

 

[Shude]

So you fall in the 17 to 21 bracket?

Maybe a few years ago!
I imagine the plan is to eventually roll this out to the rest of the driving population though.

 

[Mr E]

Nobody at Norwich union sat there and said "how can we save our customers money?" More like "how can we change the current system so we can look like we are trying to save customers money?"

Most of us will probably not see any saving from such a scheme.

The conversation was "how do we save money on paying out on claims?" Which is kinda "how do we save money", but there is the marketing view of "we can save customers money by...." as well. The idea is that less-risky drivers pay less - and if you can identify risk at a granular level and charge on that basis - you can then associate the risk against the charge.

The main failing of this (and others) is that it does nothing to protect uninsured losses - those who drive around with no insurance are statistically more likely to be involved in an incident.......but you can't save any more money than paying out nowt.

Here's a thought - a central fund giving all vehicles a basic coverage (third party) funded through a fuel levy - insurance premiums would decrease as it would effectively be a top-up to the basic cover..........doubt that the increase in fuel cost would go down well though. Just a mad Friday afternoon musing........

 

[Shude]

Here's a thought - a central fund giving all vehicles a basic coverage (third party) funded through a fuel levy - insurance premiums would decrease as it would effectively be a top-up to the basic cover..........doubt that the increase in fuel cost would go down well though. Just a mad Friday afternoon musing........

This could be accomplished in the same way that some other countries do it - dump a 3rd party only insurance charge onto road tax or "registration". Ok your road tax would go up by a couple of hundred pounds maybe but your premium would fall by the same amount (at least) and then everyone with road tax is also insured. If you want to get extra cover you can then do so.

This assumes that everyone taxes their cars and keeps the DVLA updated.

I like the new police policy of crushing uninsured cars! Slowly but surely the roads are being cleared of old novas and fiestas!

 

[Mr E]

This assumes that everyone taxes their cars and keeps the DVLA updated.

That's the basic problem. At least adding a fuel levy ensures that the vast majority of vehicles would then have a basic cover, until there is a better way of quickly / automatically checking the licence status of the vehicle.

Only too pleased to see the demise of old Fiestas and Novas.......I'm sure that my old wheelbarrow has more structural integrity then most of those (and the driver's usualy a bit more sensible...)

 

[BenzComander]

Sorry to bang on about the Germans, but they have a system where your insurance is displayed on your number plate. It's a small disc that is easily checked for validity by camera's, traffic wardens, traffic cops, members of the public It's issued to you when you take out insurance and it is an offence to not display it. Seem's to work for them!

Cheers,

 

[Spinal]

This is great for 17-21 people like me! Ill go to a car auction, get a 1980's car that barely passes mot. Then I insure it and dump it in the front yard. A years no claim bonus for 199£ ... now thats cheap!
Spinal

 

[Shude]

This is great for 17-21 people like me! Ill go to a car auction, get a 1980's car that barely passes mot. Then I insure it and dump it in the front yard. A years no claim bonus for 199£ ... now thats cheap!

Just insure a car that doesn't exist. No Tax or MOT required for that either, and you get to choose the virtual spec! Little chance of it being stolen too.

 

[Spinal]

Just insure a car that doesn't exist. No Tax or MOT required for that either, and you get to choose the virtual spec! Little chance of it being stolen too.

LOL! Its a little hard to get an MOT certificate that way. Till now, I've been using an OLD (version 1) fiat 500 to get some no claims bonus... lets see if this makes it even cheaper

 

[Will]

How about a scheme with ANPR at petrol stations. I know some filling stations use similar technology to record vehicle details before dispensing fuel (for security), but how about linking vehicle details (insurance, MOT, tax) to this, and only dispensing fuel to legitimate vehicles.

Could also prove useful in tracing these elusive criminals, and maybe link to local police forces?

Obviously, people would try and find ways around such a system, but it would be bound to cut the number of offenders on the roads!

Just a thought...

Cheers,

Will

 

[stwat]

BIG BROTHER. 1984. This is not good however you look at it.

Stu

 

[Shude]

LOL! Its a little hard to get an MOT certificate that way. Till now, I've been using an OLD (version 1) fiat 500 to get some no claims bonus... lets see if this makes it even cheaper

You don't need an MOT certificate for a ficticious car. For documentation purposes the only reason for having an MOT is so you can tax the car, which you're never going to do either because it doesn't exist. I know it's fraud, but I can't imagine the insurance company being THAT bothered that you're essentially giving them money for NO RISK. It's not like you would ever claim for the thing anyway is it? That's the whole point of the exercise!

If you were that bothered you could buy a seriously cheap car from an auction for £50, scrap it but have a polite word with the scrapyard and keep the V5c etc. You'd have to declare it SORN every year but otherwise that's basically legal. I still prefer the idea of insuring a totally ficticious car though