Norwich Union is trialling a new pay as you go-style insurance scheme aimed at offering drivers 'fairer' premiums.
The system involves fitting a telematics device to the vehicle, which sends data direct to Norwich Union, which then bills customers according to their risk profile and mileage.
Drivers will only pay insurance premiums according to how much they use their vehicle and where they use it.
The black-box technology costs £350 per car, although the firm expects this to drop by 2004. It says savings in premiums could offset the initial cost.