Insurance companies could soon invest in technology in order to charge motorists more fairly and accurately for their car insurance, the Association of British Insurers (ABI) has revealed.

Following the recent trial of 'black box' technology, which involves installing a box in the car to record driving data, the ABI has claimed that such technology could become widespread.

Data on a number of factors such as the distances that people drive and the location of where they are driving, are two criteria which could be beneficial to insurers.

Malcolm Tarling, a spokesperson for the ABI, revealed that some companies are already testing the idea on a pay-as-you-drive basis.

"It enables your insurance to be on a pay as you drive basis. It records your mileage and, importantly, where you're driving. It's a method of effectively ensuring your premium reflects the risk," he said.

The ABI is the body which represents the interests of the insurance industry in the UK.

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