Norwich Union is set to revolutionise motor insurance with a new Pay As You Drive scheme.
The insurance giant, which has a major base in York, will be able to collect vehicle data using a "black box" device installed in customers' vehicles.
The box measures vehicle usage and sends data directly to Norwich Union using similar technology to that used by mobile phones.
Customers could be billed monthly, with payments calculated on the basis of how often, when and where their vehicle is actually used.
Norwich Union says the technology will also allow the insurer to offer complementary in-car services, such as emergency assistance and real-time route planning.
A spokesman said it believed an agreement it has signed with pioneer US insurer, Progressive, represented a major breakthrough in the calculation of fairer motor insurance premiums.
He said research commissioned by Norwich Union showed that motorists strongly supported the introduction of such a scheme.
"Nine in ten people say they would prefer their motor insurance to reflect the usage of their car and the type of journeys they make," he said.
Following an extensive consultation period, 5,000 motorists will be recruited later this year to test the customer benefits of Pay As You Drive insurance and the demand for associated services.
Updated: 11:38 Wednesday, February 20, 2002
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