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Pay by the mile car insurance? Only if you live in Texas

Posted by on October 21st, 2008 at 4:20 pm

“When you stop your car, we stop your premium”

That’s the tagline of MileMeter, a company that provides auto insurance “buy” the mile (get it?). In a video on the company’s website, founder and CEO Chris Gay says they started the company because they were frustrated with what was available. Here’s an excerpt from the video:

“We wanted to create an insurance company that is fair, and made sense. If you walk to work, or you take mass transit to work, or you are a low-mileage driver, you could be a MileMeter customer. It also creates a financial incentive for you to drive less, which means we’ll have fewer traffic injuries, less smog from vehicle emissions, and a number of other social and policy benefits.”

Wow. Now there’s a company speaking my language.

“Paying by the mile would be significantly better for me, and probably for a ton of other bike commuters out there.”
– real estate Adam Rust

North Portlander Stephanie Turner — a mom of two who works from home and uses a bike to get around the neighborhood — heard about it a few days and “got really excited”. But when she called for a quote she found out they only do business in Texas.

Adam Rust is a Southeast Portland-based real estate agent. He also emailed me the link after hearing about MileMeter (they were recently featured in a national NBC story).

Rust says he was just asking his insurance agent about getting a break on his rates because he only drives a car once a month. As a real estate agent, Rust said he’s forced to pay a premium that’s about $70 higher (per six months) than the average user — even though he’s “not in the same camp as other real estate agents”.

He gets around a lot by bike, and only uses his car sparingly. “Thatís why paying by the mile would be significantly better for me,” he said, “and probably for a ton of other bike commuters out there.”

Rust, like Stephanie Turner, was disappointed to learn MileMeter was only available in Texas. His plan is to “try to mobilize the bike community to support this kind of insurance so that it can be bought by the mile in Oregon.”

I agree with Adam. The Portland market is especially ripe for car insurance like this.

Check out MileMeter.com and drop the company a line if you’d like to encourage them to open up shop here in Oregon (or any other state for that matter).

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Comments
  • K'Tesh October 21, 2008 at 5:10 pm

    Tell Me MORE!!! :D

    If the price was right, this might make me go out and buy a car… I then would make sure that my PIP/UM/UIM was MAXED and leave the machine stuck (and allowed to rust in peace) in the parking lot of my apartment complex (less battery).

    That way I could get coverage in the event of another crash…

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  • Adam October 21, 2008 at 5:25 pm

    This is awesome. Depending on their rates it could be very benificial to even a frequent driver. This type of insurance would make it much simpler for me to drive, which I don’t do now. Please open up shop here in Portland!

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  • bahueh October 21, 2008 at 5:41 pm

    ya, depending on rates, I would totally look into this service.
    My subaru only sees about 6K a year now with my bike commute habit…weekend driving only and holidays.

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  • mark October 21, 2008 at 6:09 pm

    “Usage based insurance” is available in Oregon through Progressive under the moniker ‘MyRate.’

    It carries some interesting baggage, however. The technology “records driving behavior such as speed, time of day, how many miles you drive, etc.” Particularly as a cyclist, I appreciate how this aspect discourages and penalizes dangerous driving. But on the other hand, those predisposed to dangerous driving are unlikely to invite Big Brother into their vehicles.

    Another drawback: vehicles manufactured before 1996 lack the necessary diagnostic port and thus cannot qualify.

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  • mark e October 21, 2008 at 7:30 pm

    yeah, that’s a good idea. interesting that it’s in Texas. I grew up in Dallas and you have to drive a hundred miles just to go to the grocery store. everything is a road trip cause it’s so spread out. I wonder if this is in Austin? about the only city I would think would be that progressive in Texas. I use Progressive and I was interested in that “usage based insurance” until I heard they actually record the way you drive. plus my car is too old. I don’t drive like a maniac, but I do like to drive fast when I can. And I wonder how they would react after I had a day at the track doing autocross?

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  • Randy October 21, 2008 at 8:01 pm

    This could work in Oregon. More parked cars = clean air.

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  • Opus the Poet October 21, 2008 at 8:45 pm

    It’s not quite as bad as that here in Big D, but there are a lot of people who are convinced that they can’t live without a car (like my roommate). Given the huge number of hit-and-run against bicycles (of the 4 people I know that were hit while riding there were 5 hit-and-run wrecks), I wish there was some kind of collision insurance (with coverage for uninsured drivers and hit-and-run) that I could buy for my bicycles.

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  • Mark Allyn October 21, 2008 at 8:48 pm

    Could a bunch of us get together and start such a company?

    Cleara

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  • AdamR October 21, 2008 at 11:09 pm

    Before we shoot down the Mile Meter model with smart ass sarcasm, let’s consider some important facts:

    1) Lots of people who do currently bike also own at least one car. This variety of insurance would be very beneficial to such people.

    2) Mile Meter does not use any reporting technology or GPS, so excuses about old cars or Big Brother scare tactics won’t work here.

    3) The reason why Mile Meter is not available in other states is because each state has its own Insurance Commissioner who estalishes the criteria that companies must meet in order to sell insurance in that state. The Insurance Commissioner of Oregon has pretty hefty requirements on the captial & surplus limits, which makes it too expensive for a young company like Mile Meter to do business in Oregon.

    Given these facts, consider what will do the greatest good. The people who already bike a lot and have a car would obviously benefit. Secondarily, this may add some incentive to people who are considering biking, but haven’t quite been able to get out of the car yet. So, this could actually help get more people on bikes.

    So, if you want to do better than posting idle comments about your rusted beater in the parking lot of your appartment complex, then call your state insurance commissioner. Consumers can contact the Insurance Commissioner’s office to let them know that we want this kind of insurance in our state, and the Commissioner’s office can consider changing their policy to facilitate that. Here is how to contact the Commissioner’s office:
    Yani Horst – Consumer Liason
    503-947-7238
    yani.horst@state.or.us

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  • joe October 22, 2008 at 5:05 am

    Wow, this is cool. The more economic incentives for people to get out of their cars, the better.

    AdamR – thanks for the info on the Insurance Commissioner. also, you may want to readjust your sarcasm meter a bit. either way, put me in the camp of those rooting for milemeter.

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  • resident October 22, 2008 at 6:20 am

    State Farm has an option for those who drive less than 7500 miles/year and do not drive to and from work. I put my truck on this since I only use it for grocery shopping and hauling camping gear on the weekends. It saved me 1/2. They were suspicious and have asked a few times what my odometer reading was (they see my residence in gresham and work address in beaverton) but after riding my bike into their office and showing them the mileage on my cycle computer, they stopped buggin me.

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  • Steve G October 22, 2008 at 6:21 am

    Start emailing the Insurance Commissioner.

    I just did, at: yani.horst@state.or.us

    Also, anyone who drives once a month should probably ditch their car and use Zipcar ($9/hour; $60/day, including insurance, gas, maintenance and repairs. Think of it as “pay as your drive insurance” on steroids: it’s “pay as you drive car ownership/insurance/gas/maintenance and repairs.”

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  • Nat October 22, 2008 at 8:18 am

    Another vote for this.

    We bike/bus commute but use our vehicles for camping and lots of road-trips so they sit in the driveway 90% of the time. Zipcar isn’t so travel friendly and rental cars wind up being even more expensive than owning/insuring/maintaining your own vehicles if you travel long distances. Not to mention we’re (perhaps unfortunately) addicted to the truck camper.

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  • Oliver October 22, 2008 at 9:48 am

    This sounds like a great idea in theory, and if taken on face value would be a great idea.

    However, I always cast a skeptical eye toward boutique, niche, premium and pay-as-you-go products, as they are always going to carry a premium price-tag.

    It’s kind of like looking at the price per unit part of a supermarket price tag. I would feel ripped off if I couldn’t see the rate down around the $-per-mile figure of a normal mileage insurance policy. It’s like again being penalized for not driving.

    There’s been a lot in the news recently about certain insurance companies and the lack of capital to cover their debts/losses. As ever, regulations exist for a reason.

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  • Stephanie October 22, 2008 at 10:12 am

    The reason I found myself excited about this insurance concept is because our family of 4 uses our “big red” Eurovan as a vehicle for camping and driving long distances only…we can sleep, cook and play cards in it. The van sits in our driveway about 80% of the time and as Jonathan mentioned both my husband and I work from home and ride bikes and walk almost everywhere.

    Jonathan, thanks for bringing this topic up for discussion. I knew there would be skeptical people out there in the bike community; for our family of 4, being completely car-free just isn’t an option and as Nat mentioned Zipcar and rental cars just aren’t a viable option either.

    Steve G, thanks for the Insurance Commissioner’s email address…

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  • T Mike October 22, 2008 at 10:15 am

    I get a discount from my insurance company because I drive less than 5000 miles a year with my vehicle. I don’t know if this is available with other insurance companies, but I recommend asking your company if they have a program like this if you don’t drive too much. If not, find one that does.

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  • Steve October 22, 2008 at 10:56 am

    “Why donít your offer insurance in states other than Texas?

    Weíd love to! You can help us in two ways if you donít live in Texas. First, contact your State Insurance Department and local State Representatives to ask for MileMeter in your state. Your Insurance Commissioner and Legislature have the power to make reform happen! Second, encourage your friends in Texas to purchase a policy from us.”

    From the MileMeter website.

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  • David Dean October 22, 2008 at 11:58 am

    If you have a car that is newer than 1996 you can get Progressive MyRate insurance in Oregon which is a pay as you go solution.

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  • Ed October 22, 2008 at 4:01 pm

    Ed from MileMeter here.

    Wow. It’s great to see this kind of enthusiasm for what MileMeter is trying to do. We’ve gotten a lot of blank stares from people in the past – it’s very gratifying to see that you “get it”.

    Honestly, we’d love to sell MileMeter insurance in Oregon. But, even with everything going smoothly with the Oregon Insurance Commission, getting approval is a process that will take several months. We’ve started in Texas, where it took us years to get approval. We’d love to sell in Oregon, and every state for that matter, but it costs us a lot of time and money to expand into a market. When we’re fighting to change a whole industry to adopt consumer and environmentally friendly policies, we have to choose carefully where we expend our resources.

    Bottom line – for MileMeter to come to Oregon, we’ve got to have success in Texas. If you really want to buy MileMeter in Oregon, help spread the word for us here in Texas – tell your fellow bikers, friends and relatives in Texas about us. Success here means we can expand quickly there. Your advocacy with the Oregon Insurance Commission an the Oregon Legislature are very helpful in the long run, but your help in Texas is needed in the short run.

    Again, thanks for the enthusiastic support! We’ve been absolutely floored by the number of emails and phone calls we’ve been getting. We never expected to have people this excited about MileMeter in Portland this fast!

    - Ed and the MileMeter Team

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  • colleen October 22, 2008 at 4:24 pm

    Totally awesome idea! Would not only be good in Portland but all up and down the very blue western part of the state.

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  • Anonymous October 29, 2008 at 8:00 am

    In 2003 Oregon passed a law introduced by the Oregon Environmental Council
    ( http://www.oeconline.org/about-us ) as House Bill 2043 that not only allows but encourages pay-by-the-mile insurance with tax credit incentives for insurers which currently run through 2009.

    Mark is right, Progressive is the one state-wide program that has a qualified plan available as pay-by-the mile. The mileage is tracked with a device connected to the vehicle and that technology is only available on 1996 and newer vehicles. Most companies offer some discount for ďpleasureĒ use and lower annual miles as a part of their basic rate structure.

    The Oregon Insurance Division would be happy to review an application by MileMeter to do business in our State. They would need to meet the financial solvency requirements outlined for all insurers.

    If you have insurance related questions of any kind we are here to help. Please feel free to call our consumer advocates at 1-800-877-4894.

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  • [...] Pay by the mile car insurance? Only if you live in Texas [...]

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