technology transport

The benefits of car insurance by the mile

Three years ago I wrote about pay as you go car insurance, and wondered whether it might be able to help reduce CO2 emissions from driving. I recently saw a poster for a new service called By Miles, and I thought I’d check in on the idea.

I’m partly interested for selfish reasons. Walking is my preferred form of transport and in the course of going about my daily business I walked 46 miles in January. (I’m tracking my transport modes more closely this year). I’d rather not have a car, but there are a handful of things we need it for as a family each week. My wife takes the bus to work most of the time, but does breakfast radio shifts which start before the buses are running. I take the kids swimming and while it’s a perfectly bike-able distance, there isn’t quite enough time between school ending and the lesson beginning. We take the car on days out and camping, but both our big holidays last year were by train. Really, the car is on the driveway most of the time.

And obviously, if a car is parked up off the street, it’s very unlikely to get into an accident. The more time you spend on the roads, the greater the chance of being involved in an accident of some kind. It totally makes sense to pay car insurance based on how many miles you actually drive, rather than a flat fee.

In fact, a flat fee might even imply you should drive more and get your money’s worth, whereas pay-as-you-go rewards you for driving less. With apps and in-car monitoring now available, it’s possible to see exactly how many miles you’re driving and therefore how much you need to pay. It’s a clear incentive to drive less and keep costs down, cutting traffic and emissions in the process.

This was a relatively new idea when I wrote about it in 2017, but By Miles are now established and touting for your business. “The less you drive, the less you pay”, they say. It works by plugging in a small miles tracker, or with newer cars or electric cars, by connecting the car directly to the service. You can keep tabs on the journeys that you do and see exactly what they would cost.

Traditional insurance is going to work better for people who commute in the cars or use them every day. For those who perhaps aspire to travel more sustainably, a more active form of insurance might be a good prompt to leave the car at home more often.

As By Miles CEO James Blackham says, “Car insurance is a product that’s barely changed in 30 years. We want to make car insurance fairer, and the whole experience of owning a car much easier. Every extra mile you drive adds to the risk of an accident. We think it’s high time that this is reflected in the price infrequent drivers pay.”

Does anyone have any experience of pay as you go insurance?

4 comments

  1. No direct experience but our various insurers all ask for our approximate annual mileage which is only around 3,000 and the insurance for hubby and me as named 2nd driver is just £119 with the RAC and was similar with the Post Office, but we do the annual comparison sites for the best.

  2. No direct experience. but insurers always ask for our approx. annual mileage which is around 3.000. Comprehensive insurance for hubby and me as a named 2nd driver is £119 (currently with the RAC). We do online comparison each year..

  3. I have a classic car and use it for less than 3k miles / year. My premium is based on that mileage. If it looks as if I will do more, I have to tell them and would move into the next band, which is up to 5k miles. This ‘banded’ mileage-based insurance has been available for many years for older and specialist vehicles. It just doesn’t use technology to actively and accurately track miles (impossible for veteran cars with virtually no electrics!)

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