Fleet News

Fleets pay on use for car insurance

FLEETS could be charged by the mile for their insurance following a major pilot programme involving hundreds of motorists launched by one of the country’s biggest insurers.

Norwich Union is fitting 5,000 vehicles with black box telematics to record the types of journeys they make and charge them accordingly.

The company will spend two years evaluating the ‘pay as you go’ pilot scheme before deciding whether to launch it nationwide.

Norwich Union described interest in the pilot scheme as ‘phenomenal’ and said those taking part in the pilot scheme ranged from low mileage users to long-distance drivers.

A spokeswoman said: ‘We’ve said before that there are a number of markets where this type of insurance would be suitable but the pilot programme is solely using private cars.

‘We are not ruling fleets out in the future but it is very early days yet.’ David Faithful, a partner at solicitors firm Clarke Willmott, said it was almost certain that fleets will be targeted by this type of technology.

‘Inevitably, this sort of system is being geared towards fleets and I’m sure it will happen, even though the pilot scheme is for the public,’ Faithful said.

‘It’s a great system for a little old lady who uses her car to go to church on a Sunday but it will have a big impact on fleets. Some companies, which have cars but don’t use them often and not during busy times, may find their insurance cheaper, but for many companies insurance costs will increase.

‘If this pilot scheme works, it will be easy for the insurance industry to put forward a business case saying everyone should be included. And the fact that cars coming off the production line will already be fitted with telematics technology that allows this to happen means fleets are a prime target.’

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