Paying by the mile no longer requires special hardware. Just take a picture of your odometer from time to time. Read more here
Reading of Interest
Number One Issue for the Public: Price of Travel – http://www.fhwa.dot.gov/policy/2013cpr/chap1.htm#5
National Travel Trends (see Table 17) http://nhts.ornl.gov/2009/pub/stt.pdf
Joseph Ferreira Jr. and Eric Minike (2010), Pay-As-You-Drive Auto Insurance In Massachusetts: A Risk Assessment And Report On Consumer, Industry And Environmental Benefits, by the Department of Urban Studies and Planning, Massachusetts Institute of Technology (http://dusp.mit.edu) for the Conservation Law Foundation (www.clf.org); at http://www.clf.org/wp-content/uploads/2010/12/CLF-PAYD-Study_November-2010.pdf.
Litman, Todd. 2008 (a). “Distance‐based vehicle insurance feasibility, costs and benefits.” Victoria Transport Policy Institute. http://www.vtpi.org/dbvi_com.pdf
Litman, Todd. 2008 (b). “Pay‐As‐You‐Drive insurance: recommendations for implementation.” Victoria Transport Policy Institute. http://www.vtpi.org/payd_rec.pdf
Greenberg, Allen. 2009. “Costs and benefits of varying per‐mile insurance premiums based upon measured risks specific to each mile driven.” Federal Highway Administration, http://www.vtpi.org/AG_PAYD.pdf
Transportation Energy Data Book Chapter 8 Household Vehicles and Characteristics
http://www-cta.ornl.gov/data/chapter8.shtml see Table 8-5
Shaken, not stirred – The “now” disruption of auto insurance
Telematics proved how to calibrate miles into money, and now, smartphones will pay for themselves for the consumers who wield them.
Costly and privacy invading tracking systems installed in a car computer, mated to a vehicle port with a “dongle thingy”, or ghosting a cell phone’s reception turn for turn serve a lot of practical purposes, but they are complete overkill and waste of money for verifying odometer readings.
Consumers who drive less are set to explosively benefit from the hard and expensive progress which telematics has created. The last decade of telematics pilots and trials have eked out single digit adoption rates among consumers who have submitted themselves to the process. The new normal springs from this suffering though, and it embodies a formal way to price traditional distance-based insurance into small increments of miles used by a consumer. Usage based insurance for the mass market is here.
Instead of no low miles discount or a simple small percent reward for driving less than 7,500 miles a year, now a lower miles vehicle will be rewarded dynamically with potentially lower costs for every mile less they drive. The same person who drives 5,000 miles a year now might get more than a 30% discount where under the old system perhaps barely a 10% discount might have been offered if a program was even offered.
In many states, miles are not now used in rating, or if they are, they may have some heavy handed measuring devices imposed on the few drivers who opt in for that sort of snooping. Time is up for experimenting with gizmos, “drive less, pay less” is the in the now mantra.
Consumers with lower miles can verify their actual readings on a timely basis by simply taking a picture with their smartphone. A smartphone application will help the consumer not only remember to take the pic, but will help them shop for insurance by alerting them to when carriers in their state pay more for those customers who drive less.
Marty Ellingsworth is the President of Salt Creek Analytics which has developed a patent pending solution called Fresh Miles™ for helping consumers mind their miles and maximize their discounts.