Technology will now be allowing drivers in the state to have premiums that reflect their behaviors.
An auto insurer in Oregon, MetroMile, has announced that they will now be selling a usage based insurance policy that will calculate their premiums based on the number of miles that the motorist has driven.
The insurer will be using a sensor installed in vehicles that records the miles driven in the vehicle.
The company is taking a similar angle to a utility meter with the concept of usage based insurance, where the number of miles drive are logged, and then the consumer receives a bill based on that figure. The insurer has said that its prime target market is a driver who would typically drive between 5,000 and 8,000 per year. They said that this would allow them to save between 25 and 30 percent on their premiums every year when compared with traditional auto insurance.
Other insurers are already applying usage based insurance for tracking other driving behaviors.
Those behaviors include miles driven, but also go on to consider the number of times the user has to brake hard, the number of turns in each direction, times of day that the vehicle is driven, and other factors. In the case of MetroMile’s usage based insurance, the approach is quite simple and unique.
That said, the usage based insurance device that is used by the insurer is also capable of collecting a great deal more data than they are using in their plan that counts the number of miles. This indicates that it could one day consider other factors for premiums calculation that are linked to the condition and performance of the vehicle, such as its emissions data and diagnostics data.
The company has indicated that it intends to work some of those concepts into its programs in time, in order to help drivers who perform more safely to further benefit. This includes providing customized tips for driving more safely, achieving better fuel mileage, or understanding what is being repaired within their vehicles.
According to the co-founder and chief executive of the insurer, Steve Pretre, who spoke about the usage based insurance “By having people pay per mile, it also creates an incentive to drive less.” He explained by saying that “We can help people make lifestyle decisions they want to make anyway.”