Charging motorists according to their accident risks

This is a splendid idea - tailoring the insurance premiums paid by motorists not only to their mileage but also to the characteristics of their journeys. It encourages motorists to reduce the number of trips made and to avoid travelling at times when their journeys present hazards for others.

A scheme to charge motorists by the mile for their car insurance has been welcomed by a road safety group. AA Motoring Trust said Norwich Union's pay-as-you-drive car insurance policy for drivers could reduce accidents. Under the scheme, an in-car "black box" device calculates premiums based on when, and how often, the car is used. The AA said charging people more for driving late night when many accidents occur could change driver behaviour, particularly among the young.
"During the early hours of the morning, you are 17 times more likely to be involved in an accident if you are a young driver," said Andrew Howard, head of road safety at the AA Motoring Trust. "Anything which makes young people think again about taking to the roads during these hours - such as having to pay high insurance costs - is likely to have an effect on accidents." Pilot success The nationwide roll-out of Norwich Union's pay-as-you-drive cover follows a successful pilot scheme, during which 5,000 drivers who were fitted with in-car devices to monitor when, how often and on which roads they drove. The company will offer policies for motorists with a sliding scale of charges in two different age groups. Charges for drivers aged 24 to 65 go as low as 1p a mile for off-peak motorway driving while under-23s will be charged up to £1 a mile when driving at night. The company has said the latter charge will discourage young drivers from taking to the road between 11pm and 6am, which is seen as a high-risk time for accidents involving inexperienced motorists.
Low-mileage reward Data collected from the GPS-based devices installed by Norwich Union will be used to work out how much drivers need to pay on a monthly basis.

HOW IT WORKS

A "black box" device is fitted to the car. It uses Global Positioning Satellite (GPS) technology to record the journeys of the car. This information is then transmitted securely to Norwich Union via a mobile phone network
The time of the day, type of road and mileage of the drive is taken into consideration when working out the monthly charge to customer. Norwich Union's Iain Napier said the scheme had the potential to reward low-mileage drivers with cheaper premiums. "The launch of pay-as-you-drive insurance will give motorists access to insurance that is specifically tailored to them and their driving habits," he said.
Norwich Union's scheme is voluntary at present - but if such schemes were to become compulsory, the AA Motoring Trust said it would like to see safeguards. "Ultimately, it maybe something parliament has to get involved in," Mr Howard told BBC News.
"How would the information about people's travelling patterns be used, and who would have access to it?"