'Big brother' insurance scheme canned

* Norwich Union suspends service * Drivers tracked by satellite * Insurance paid depending on when they drove...

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Jim Holder
16 Jun 2008 10:24

Norwich Union has suspended an innovative car insurance scheme less than two years after it was set up.

Britain's biggest insurer had launched a pay-as-you-drive policy that tracked every journey using a black box installed in customers' cars.

It resulted in cheaper premiums for people who avoided driving at high-risk times, such as at rush hour and late at night.

For instance, younger drivers were charged at about 5p per mile if they avoided rush hour, but 1 a mile for driving late at night, when they are statistically more likely to be involved in serious accidents.

Norwich Union had set a target of 100,000 drivers to sign up to the scheme. The company would not reveal exactly how many people had signed up, but told the BBC that it was 'not less than 10,000'.

The company said too few customers had joined, and blamed a slow take-up rate of the technology among car makers.