Norwich Union has launched ‘Pay As You Drive’ motoring insurance for young drivers for motorists aged 18-21, which uses cutting-edge, in-car technology to calculate their premiums based on when and how often they drive their car.

The ‘black box’ style device is fitted discreetly into the car and 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 premiums will be calculated in a similar way to mobile phone tariffs. Drivers will be able to control their premiums to more affordable levels by driving mainly during ‘off peak’ times between the hours of 6am and 11pm rather than driving during ‘peak’ times between 11pm and 6am.

Norwich are targeting the scheme at young drivers and the tariffs have been calculated based on accident statistics for the 18-21 age bracket, which show these motorists are at much greater risk of being killed or seriously injured in car accidents between the hours of 11pm and 6am.

By reflecting the time of day in the cost, this product not only makes insurance premiums more affordable, but it deters younger motorists from driving at night when the conditions are less safe.

Features include:

• A tariff per mile, with the rate personalised to each customer and dependent on the time of day the car is driven.
• The first 100 off peak miles each month are free.
• Young drivers could see a saving of up to 30% a year off the cost of their premiums.
• Premiums are billed monthly – premiums will vary monthly if customers vary their driving.
• There is a one-off fee of £199 for the telematic device – this is expected to cost less than the savings to be made in premiums.
• The box has a built in car locator – enabling customers to have their car located if there’s been an accident, breakdown or if it has been stolen.