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Car Insurance News – Norwich Union Cancels Pay as You Drive Insurance June 30, 2008

Norwich Union has announced that it has stopped offering pay as you drive car insurance policies. NU has been trading in PAYD policies for about 2 years and it seems that lack of interest is the reason for the cancellation. Norwich Union originally predicted around 100,000 motorists would take up the offering but although no official figures have been released, industry insiders have speculated that as few as 10,000 motorists have a PAYD policy.

NU also blame car manufacturers for being slow to integrate the telematics technology into the standard build of their vehicles. The telematics technology is needed to communicate data to Norwich Union’s GPS systems.

With low take up rates and waning interest it seems that pay as you drive schemes could soon be phased out as insurers look for ways to increase profitability in difficult trading conditions. Young drivers are likely to be worst affected by this as they could get discounts for driving on quiet roads and avoiding travelling at rush hour and other busy times. Young drivers often find it hard to get cheap car insurance and pay as you drive schemes allowed thm to prove a good driving record to their insurers in return for a discounted premium.

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