Insurer plans to record driving habits with black boxes in cars

Motorists are to have their journeys tracked on airline-style black box data recorders under plans to provide "tailor-made" insurance which reflects individual driving habits.

Norwich Union yesterday announced the launch of Britain's first "pay-as-you-drive" insurance policy, which will calculate individual premiums according to how often motorists use their cars, what time of day they travel and what type of roads they drive on.

Customers will have devices installed in their cars which transmit information on their driving to the insurer, enabling the calculation of an individual monthly calculation, rather than an annual flat rate.

Robert Ledger, the insurer's programme director, said: "This initiative provides drivers with the opportunity to really be in the driving seat when it comes to controlling their premiums."

Customers who tend not to drive during the rush hour or only use minor roads would be likely to see their premiums lowered as the chances of them having an accident are reduced, according to the insurer. The pay-as-you-go system would also reflect seasonal driving habits, with a lower premium over summer holiday periods if a vehicle is not used.

A Norwich Union spokes-woman said: "For example, if someone breaks a leg and can't drive for six months, their lowered insurance will reflect that, unlike the system we have at the moment."

The black box recorder, which is currently available for £350, incorporates a satellite tracking device which also allows for stranded vehicles to be tracedby the emergency or breakdown services.

Norwich Union plans to pilot the scheme on 5,000 customers later this year, and anticipates the box will be commercially available by 2004 at a lowered price.