Chris Gay has cleverly branded his business as the “anti-insurance insurance company.” The ex-software engineer conceived his business concept centered around allowing motorists to pay insurance based on their recorded mileage. He launched MileMeter, an online platform, in 2008. Now, MileMeter is profitable and its popularity and reach are steadily growing.
Understanding How MileMeter Operates
MileMeter is custom designed for individuals who drive 12,000 miles or less each year. It is particularly beneficial for those who drive sparingly but pay substantial sums for insurance. This includes public transit commuters, owners of seldom-used secondary vehicles, elderly drivers, and college students. It seems illogical for these occasional drivers to acquire identical policies to frequent drivers. Instead, the ‘pay as you go’ insurance model allows drivers to pay a premium that’s proportionate to their risk level, rather than subsidizing premiums for riskier drivers. The underlying logic is simple: the more you drive, the greater your risk of accidents. If you’re on the road less often, you should pay less.
To avail MileMeter’s pay-per-mile coverage, clients provide basic information such as their age, location, car model, and a photo capturing the car’s odometer, alongside a driver’s license, all online. The company doesn’t require driving records or credit histories. Customers can purchase prepaid 6-month coverages for anywhere between 1,000 to 6,000 miles, and unused miles can be pushed forward to their renewed policy.
The Financial Advantages of MileMeter
MileMeter asserts that numerous clients save 40% to 70% when they switch from traditional car insurance. The Brookings Institution, a non-profit organization, agrees, noting that drivers could save hundreds annually under this model. It points out that typically, drivers from similar demographics pay identical premiums, regardless of their actual mileage.
The Brookings Institution also suggests that pay-per-mile insurance offerings like MileMeter’s could encourage drivers to limit unessential trips. They estimate an 8% nationwide reduction in driving, equating to exceeding savings of $30 billion from lesser traffic congestion and accidents, and environmental and energy benefits, if pay-per-mile insurance becomes mainstream.
The Success of ‘Pay as You Go’ in Europe
European drivers are already experiencing the financial, environmental, and fuel efficiency benefits of pay-per-mile insurance. As industry trends increasingly prioritize aligning premiums with a driver’s real risk level, riskier drivers are likely to face the steepest insurance costs. This could lead to a decrease in accident rates as drivers limit their trips and consequently spend less time exposed to road risks.
Jessica Bosari, writing for CarInsuranceQuotesComparison.com, regularly covers topics related to insurance and vehicles. She holds the belief that well-informed consumers secure better auto insurance discounts, thanks to their informed choices when comparing insurance providers.
