What a great idea- too bad we live here, but maybe it will catch on!

Pay as you drive" insurance hits roads

By Jennifer Hill

LONDON (Reuters) - The "pay as you go" concept is nothing new: from mobile phones to utility bills, consumers are able to pay for goods and services at the point of consumption.

Now, Britain's first "pay as you drive" car insurance policy has taken to the road.

The cost of the motor cover, from Norwich Union, will vary depending on when, where and how often motorists use their cars, determined by data from in-car global positioning system devices.

Customers will receive regular bills based on car usage, including the time of day journeys are made, the type of roads driven on and the mileage clocked up in the process.

Itemised bills -- like those in the mobile phone industry -- will detail the premiums charged for each journey, and the monthly total.

The usage-based car insurance, which will cost from a penny per mile, has been designed to help drivers control insurance costs and could save some up to a third on their current premiums, according to Norwich Union.

Iain Napier, director of "pay as you drive" insurance, said the cover would give motorists access to cover tailored to them and their driving habits -- and could reward them with cheaper premiums.

"We're confident that 'pay as you drive' insurance is simply a fairer way of calculating premiums and gives customers greater control, flexibility and choice," he said.   Continued...