Auto Insurance By The Mile
Back in 2005, we covered Norwich Union’s Pay-as-You-Drive program in the UK to charge consumers for auto insurance based on how often, when and where they use their vehicles. Starting in Texas, the United States will soon see a similar service for the first time thanks to MileMeter’s “auto insurance buy the mile.”
MileMeter will use consumers’ usage levels to determine how much they must pay for auto insurance. MileMeter will not use any kind of vehicle tracking device to record that usage. Rather, consumers will buy coverage in advance in increments of as few as 1,000 miles; when their odometer reaches the end of that increment, the coverage expires. The cost per mile varies with the geographic area and the age of the driver, but a reasonable ball park for a 30-year-old driver and minimum coverage in a midrange urban ZIP code in Texas might be 4 cents per mile, MileMeter CEO Chris Gay says. Multiple drivers in a household can also be covered for a single vehicle.
Dallas-based MileMeter will launch in Texas this summer, with plans to roll out quickly to other states, Gay says. Because it doesn’t use gender as a basis for determining rates, MileMeter has been ardently supported by the National Organization for Women (NOW). And by rewarding drivers who use their cars less, it has the potential to make an environmental impact as well. Sounds like a win-win all around—time for more entrepreneurs to start thinking in increments!
Photo by Springwise.
tiffany on February 1st, 2008 1:36 am
I think MileMeter will do well in Texas,, and after they report their quarterly earnings, I imagine some companies may try and charge the same way as them.
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