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New car insurance scheme launched

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Co-operative Insurance has launched a new 'smartbox' car insurance scheme for young drivers, which calculates premiums based on their driving behaviour.

The 'pay how you drive' insurance scheme comes with a 'smartbox' which is fitted into the car and monitored using satellite technology.

It reports back on how drivers aged between 17 and 25 behave while behind the wheel. The system monitors acceleration, braking, cornering and speed as well as times of journeys.

Policyholders will be assessed every 90 days, and will be rewarded with a discount of up to 11% on their annual premium if they are found to be driving responsibly.

According to the firm, 52% of young drivers would be able to save about £328 on average with the help of the new scheme.

However if the 'smartbox' reports irresponsible driving, motorists could face a 15% hike in premiums. In cases of extreme speeding, drivers may also see their insurance policy being cancelled.

The smartbox techonology aims to give young drivers a chance to prove themselves as responsible drivers, and not end up paying high insurance premiums.

Co-operative Insurance said it will "dispel the assumption that all young drivers will drive badly and have accidents".

© Press Association 2011