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Motor insurance as you drive welcomed

26/01/2005

A new type of Motor Insurance that enables driver to pay they drive has been welcomed by a leading motoring group.

Edmund King, the executive director of the RAC Foundation, said the development was a positive contribution for motorists.

The system uses GPS technology to track the insured vehicle so that usage patterns can be used to determine premiums.

At present 28 per cent of drivers aged 18 to 29 have admitted to driving uninsured at some point at an estimated cost to the industry of £500mn per year. This adds approximately £30 per year to premiums.

Speaking to the BBC, Mr King said: "Currently there is a major problem because many thousands of drivers particularly young males are totally priced out of the market."

He added: "At least this should help them to get their foot on the insurance ladder but at the same time they will have to take some responsibility."

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