MileMeter: Auto Insurance by the Mile is Greener
by Michael Graham Richard, Ottawa, Canada 
on 11.13.08
It's All About Incentives, Baby
It's no big mystery: If you have a flat rate for water, people will waste more of it than if they pay in function of how much they use. The same thing also certainly applies to cars. If people paid less insurance if they drove less, that would be an incentive to put fewer miles on their vehicles, thus using less fuel and polluting less. This would also reduce road congestion and accidents.
One company that has understood this is MileMeter from Texas. Read on for more details.
From MileMeter's FAQ:
We sell per-mile car insurance through our website directly to consumers. Rather than purchase months of insurance coverage, you can purchase miles of coverage. If you drive less, you pay less. You can print your insurance cards from the website, and the entire transaction requires only 5 minutes. The policy costs are quoted in cents per mile. You may purchase between 1,000 and 6,000 miles of coverage and pay in full at the time of purchase.
A Greener Choice
I think that all auto insurance companies should offer at least the option of paying by the mile, or to sign up for some hybrid program such as, for example, a flat rate for the first X miles and then a certain number of cents per mile over that.
The more you drive, the higher your chances of being in an accident are. Insurance companies already discriminate based on age and sex to try to have more accurate risk estimates. Adding miles driven would only make that estimate more accurate, so that people who don't drive much wouldn't be subsidizing the insurance policies of those who drive 40,000 miles a year.
In fact, with a bit of technology, we could make these incentives much stronger. We know that information feedback works (if you don't know how you're doing, you won't improve). So we could have onboard computers that not only show things like MPG, but also how much you are paying for insurance so far this month based on how many miles you've driven. The goal would of course to keep that amount as low as possible (and many people would probably save money compared to today's inflexible rates).
Via MileMeter
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Dammit, that's great! The wife only drives about 5000 miles a year. we'll check it out! thank
It looks like it is only availabe in Texas
anything similar available outside TX?
This would great if it were available in IL.
According to this article from North Bay Business Journal, the pay as you drive plan is something that might be available in California soon too.
http://www.northbaybusinessjournal.com/article/20081013/BUSINESSJOURNAL/810120283
Could be a great improvement to get more cars off the road or at least make people more aware of how much they are actually driving (so they can cut down where possible).
My blog, "Environmental pollution facts you may not know" also covers how much we each could help lower CO2 emissions by driving less.
http://biofriendly.com/blog/index.php/2008/10/24/environmental-pollution-facts-you-may-not-know/
If your zip code is not in Texas, you cannot get a quote.
By way disclosure and introduction, I'm a shareholder in MileMeter and I'm a customer. Saved about 40% in my yearly insurance costs. And I can speak from personal experience that knowing how much your insurance costs per mile really changes how you drive.
MileMeter is the only by-the-mile insurer in the country. Some other companies have done something similar in the past, but they've tried doing it by putting tracking boxes in your car - expensive, wasteful, and to our thinking completely unnecessary. Why track someone with a GPS device if you don't need to? I like my privacy, and don't want to invade yours.
It turns out that changing how an entire industry operates isn't easy. For a lot of good reasons, the car insurance industry is heavily regulated - the downside being that getting approved in each state takes a lot of time (and money). We're currently licensed to operate in Texas, because that's where we live. We want to expand nationwide, but for that to happen, we've got to have success in Texas first. So tell any Texas friends you have about us! Any help with getting the attention of the press and media is also quite welcome.
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Check it out............$15,995-$17,995
Article:
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