Will Technology Drive More Auto Insurers to Sell Coverage By the Mile?

More and more companies offer pay per mile auto insurance plans

Technology may soon steer California’s auto insurance industry in a new direction.

More and more car insurance companies now offer plans which allow customers to pay according to each mile they drive.

San Francisco based Metromile is one of several companies in the state to offer the mile-to-mile plans.

“Our average driver drives about six thousand miles a year and they save about forty percent or so on their car insurance,” says Dan Preston, Metromile’s CEO.

To collect the number of miles, Metromile send customers a tracking device that they call, “the pulse.”

Drivers insert the device into their car and it tracks the number of miles.

“The pulse sends back the number of miles driven so at the end of the month we can bill the number of miles times the per mile rate,” says Preston.”The reason it works well for our customers is that most people drive less than the average driver.”

In addition to recording miles driven, the device also notifies customers of upcoming street sweepings, and parking meter violations.

But Preston says customers can choose to turn the GPS features off in case of privacy concerns.

"We do not sell that data to external parties,” adds Preston. “Plus, customers can actually set the insurance account to not send back any data except the number of miles driven."

But Preston admits that the mile-to-mile plans are for those drivers whose commute is less than 20 miles a day.

According to one local insurance expert, all drivers should look at a list of items, not just cost, when buying auto insurance. 

“What level of counsel do you want? What level of claims service do you want? What level of contract do you want?” are among the questions that drivers should ask, says Walt Waggener an insurance broker from Carlsbad.

“After those questions, then it comes to the price. Find the company that fulfills all of the things you want,” he said.

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