Pay as you drive insurance hits the road

In a bid to help slash car insurance premiums a new ‘Pay As You Drive’ car insurance policy has just hit the road. The policy enables motorists to control the price of their premium by choosing when, where and how often they use their car.

An in-car GPS device will record the vehicles movements. Policy holders will then receive monthly bills based on car usage, including time of day, type of road and mileage. Itemised billing will be available - much like mobile phone bills - with the premiums for each journey calculated and totalled. This new policy is designed to give drivers the ability to control their insurance costs and could save them up to 30%.

Why where you are driving is important to this kind of policy is demonstrated by statistics:

• Driving during a morning weekday rush hour is 50 per cent more likely to result in an accident than driving at weekends or in the evening
• Serious accidents are more likely to occur at night
• Motorway driving is up to 10 times safer than driving on low speed urban roads
  (Source: Norwich Union and Dept. for Transport statistics)

This new initiative is worth checking out and is likely to allow certain drivers to find an affordable car insurance premium. Younger motorists, along with older drivers who do not use their car very often could benefit from cheaper premiums.

Young drivers face high premiums due to the nature and frequency of accidents. Research by Norwich Union, the government and the ABI has shown that compared with other motorists, young drivers:

• Account for 45 per cent of fatalities on the road between 11pm and 6am
• Are 10 times more likely to have an accident at night and this rises to 14 times more likely on weekend nights
• Are 56 per cent more likely to suffer an injury between the hours of 1am and 5am
  (Source: Norwich Union, ABI and Dept. for Transport statistics)

However it is important to remember that the time of day you are driving and your mileage can are not the only important factors to consider when you choose your car insurance. Your insurance also needs to cover your car when you are not driving in case of fire, theft or vandalism. Car insurance premiums are also dependent on other variable factors such as age, occupation, postcode and driving history.

How to find the best premium…
When you are looking for car insurance make sure you search the market for the most competitive premium. Make sure you compare policies on a like for like basis and check the small print and the excess levels. Don’t be swayed by adverting messages promising you lower premiums. Always check that you are fully covered for your driving needs. Never just accept a policy because it is the cheapest; make sure it is right for you. The key is to know what you want your insurance to do for you before you buy.

Get a quote for car insurance here.