MetroMile To Allow Drivers To Insure Cars By The Mile
By Mike Lindblom, The Seattle Times | |
McClatchy-Tribune Information Services |
But the industry has taken longer to make use of an obvious fact: The less you drive, the less chance you'll crash.
On Tuesday, a new variant of "pay as you drive" insurance will be offered in
MetroMile gives customers a tracking device called a Metronome, which docks beneath the dashboard in the same port mechanics use to plug in diagnostic tools.
"The typical rate is going to be
MetroMile could save its customers money if they drive fewer than 10,000 miles a year, he said.
The company's rates were approved by the
The option to buy low-mileage insurance emerges at a time vehicle miles per driver have declined nationally, since a peak around 2004.
Nationally, about 20 companies sell mileage-based insurance in some form, industry reports say.
A target market is "a younger individual or younger couple living in a city," Pretre said. Perhaps they take transit or bike to work, then use the car for errands and weekend trips, maybe 2,000 to 5,000 miles a year, he said.
"The less you drive, the more you save."
Progressive, the best known of these programs, considers not only how far you drive -- but how you drive. Acceleration and braking data show whether the client is a smooth operator.
In-car logging devices create a potential for invasions of privacy, depending on how companies use them.
MetroMile puts more weight on usage than competitors do, counting miles traveled for half the bill, said
"MetroMile really is different," she said.
Pretre wouldn't divulge how many customers he has in
Metronome provides apps that can tell users other details, such as fuel efficiency and an engine's condition. People can buy those even without the insurance, Pretre said.
Usage-based insurance has long enchanted environmental wonks, who tout the inherent reward for curtailing car trips.
Former
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But only seven people signed up, causing the program to fizzle after only
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"Usage-based insurance is on its way to becoming a standard offering," he said.
It's an interesting business plan. MetroMile's policies will incentivize people to pay for less of its product. Pretre said users tend to reduce their miles 8 to 10 percent, once they change over.
He argues that in the long run, if people are happy with savings, they will be loyal customers and will tell their friends to sign up.
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