Chris Gay has brilliantly positioned his company as the “anti-insurance insurance company.” A former software engineer, he created his business with the idea of letting drivers pay for insurance based on how much they actually drive. In 2008, he launched MileMeter, an online platform. Now, MileMeter is successful and becoming more popular day by day.
How MileMeter Works
MileMeter is ideal for people who drive 12,000 miles or less per year. It’s great for those who don’t drive much but still pay high insurance premiums. This includes public transit users, owners of rarely used second cars, elderly drivers, and college students. It doesn’t make sense for these infrequent drivers to pay the same as those who are always on the road. So, MileMeter’s ‘pay as you go’ model charges drivers based on their actual risk, meaning the less you drive, the less you pay.
To get MileMeter coverage, customers provide some basic details online like their age, location, car model, and a photo of the car’s odometer along with their driver’s license. Unlike other insurers, MileMeter doesn’t need your driving record or credit history. Customers can buy prepaid 6-month policies for 1,000 to 6,000 miles. If there are any unused miles, they roll over to the next policy.
Benefits of Using MileMeter
MileMeter claims many of its customers save 40% to 70% compared to traditional car insurance. The Brookings Institution, a respected non-profit, agrees, stating that drivers can save hundreds of dollars each year with this approach. They highlight that normally, drivers with similar profiles pay the same premiums, regardless of how much they actually drive.
The Brookings Institution also notes that pay-per-mile insurance could motivate people to drive less. They estimate this could lower driving by 8% across the country, resulting in savings of over $30 billion from reduced traffic, fewer accidents, and environmental and energy benefits if this model becomes widely adopted.
The European Experience
In Europe, pay-per-mile insurance has already shown financial, environmental, and fuel efficiency benefits. As the industry moves towards matching premiums with the actual risk level of drivers, those who are riskier will end up paying more. This shift could reduce accident rates as people cut down on unnecessary trips and spend less time on the road.
Jessica Bosari, who regularly writes about insurance and cars on CarInsuranceQuotesComparison.com, believes that informed consumers can secure better auto insurance deals. She emphasizes that comparing insurance providers helps consumers make educated choices and save money.