Pay-per-mile insurance aims to cut cover costs
Insurance overhaul
THE UK’S first pay-per-mile car insurance policy will launch later this year, promising to cut premiums for low-mileage drivers.
By Miles will record every journey using a telematics ‘black box’ and charge motorists per mile driven instead of an annual premium. Drivers will be told the cost of each trip through a smartphone app and billed at the end of the month.
Co-founder and CEO James Blackham told Auto Express he wanted to update a product that hasn’t changed in 50 years. “Right now insurance is ‘all you can drive’ but in this modern age that doesn’t necessarily make sense, especially if you’re driving less than the average number of miles in each year, which is about 7,500,” he said.
Customers will be sent a matchboxsized telematics device which they plug into the on-board diagnostics port under the steering wheel in their car. Data is sent back automatically and it will even work abroad.
With a launch set for the end of the year, By Miles has yet to reveal the likely cost of its policies, but says there are savings to be had for motorists who only drive at weekends or on a few short journeys each week. Blackham explained there will be added benefits thanks to the advanced technology found in the black box. He said: “We can read the engine codes so we have a ‘car medic’ which will tell you what it really means when your engine light is on.”
Blackham revealed the company has also received financial backing from Jaguar Land Rover, and in the future, he hopes that rather than installing a black box, insurers could work directly with manufacturers. By Miles joins a growing list of insurers like Cuvva and Insure the Box that offer flexible policies, such as hourly or daily cover.
Ben Howarth, senior policy adviser at the Association of British Insurers said: “Developments such as these show how the insurance industry is matching innovations in car tech with new products that allow increased flexibility for drivers.”
News New policy on way this year By Miles says it is aiming to revolutionise insurance market