If they Move, Bill 'em

Ian Eveleigh ponders the wonders of pay-as-you-drive insurance

Motor insurance is not one of my favourite subjects at the best of times. It is even less so at the moment, what with being in the middle of a lengthy claim process following the rear-ending of my car a couple of months ago. Usual story: the other driver slipped into a coma of over-familiarity on the approach to a roundabout. I then get my patience severely tested as my insurer demonstrates a level of uncoordinated incompetence not seen since Bambi first trotted onto a frozen lake.

The renewal quote two hundred quid higher than last year's premium – even though my name has been cleared of any blame – was a nice touch, too. They won't, of course, be getting my money, but that's nothing unusual. I have so far never managed to give the same insurer my custom for two years in succession because, inevitably, come renewal time they will be asking for more than they did the year before. No doubt the hope is that I will have recently heard (and swallowed) some sob story about rising repair costs and personal injury claims but, call me stubborn, when the car's the same and I have yet another fault-free year under my belt, I simply refuse to pay more than the year before.

Tedium

So every 12 months I trawl around the insurance companies, a painful couple of hours split approximately 50:50 between being on hold and being asked how frequent my bowel movements are, before being given a quote so laughably high that, were it the only option, public transport really would start to look appealing. This time last year they may have been promising good deals for every performance car owner, but now they're only offering cover to 47-year-old non-smoking, church-going females called Annabelle doing under 250 miles a year in a blue Kia Rio.

Eventually, usually by about the eighth phone call, a company will be found displaying some common sense (or a desperate need to snare some new customers), offering a quote which doesn't expect me to single-handedly fund one of its annoying prime-time TV adverts.

It's a silly game, but at least the unwritten rules are clear. It's easy to tell which insurers are trying it on and which ones are trying to get your business.

Pay as You Drive

Things could be about to get a good deal more complicated, though. Not convinced that it can always quote us happy by calculating the risk of a driver-and-car combo the old-fashioned way, Norwich Union is currently running trials of a pay-as-you-drive insurance scheme called, cunningly, "Pay As You Drive". The idea is that your car will be fitted with a GPS-equipped black box which will tell tales about where you drive and park. Your premium will then be calculated based upon where you've been and when.

Kinda tempting if you think you only travel through the right parts of town at the right time of day, you've got to admit. But something doesn't quite add up. With all the information already collected when calculating a premium – your age, driving experience, choice of vehicle, annual mileage, location and no claims bonus – is there really any worthwhile gain to be made in going to the effort of installing this technology in so many cars? Is this in-car Big Brother really being introduced for our benefit; so that we can give our insurers less money?

Complicated

That remains to be seen, but one thing that is already certain is that it'll be great at muddying the waters. Would you ever bother to add up 12 months' worth of varying payments to see how the total compares with a conventional policy? With such a complicated calculation process how can you possibly know if one provider of such a scheme is going to work out cheaper for you than another? And aren't you always going to remember that one month where you only paid £8.50?

Initial savings, accompanied by ignorance and indifference, could all too easily result in such a means of calculating premiums becoming widespread. Meanwhile the more sceptical of us would be caught up in the wake: choose not to sign up and you'll be penalised, the assumption being that you've got something to hide.

And what comes next? I'm sure I'm not the first person to realise that if right data is logged you could gain a pretty good idea of how someone drives – and make some pretty rash assumptions about their level of skill based on those figures. Before you know it, or maybe even without you knowing it, how fast you accelerate, how hard you brake, and how often you exceed the speed limit could all be factors used when calculating your bill.

Oh yes, and your insurer would also know exactly what you were up to prior to any accident, too... but they wouldn't use information like that against you. Would they?

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