MileMeter Car Insurance Company Offers Premiums Based on Miles Driven

Published: Tue 30 Mar 2010

Wendy Blair

Who are better drivers: men or women? On one end of the stereotype spectrum, some contend that men have natural driving skills and are far better at parking. On the other end, some argue that women are more cautious and less reckless behind the wheel.

Government figures show the truth-men and women have the same number of accidents per million miles driven. Driving myths and stereotypes recognize only that men tend to have more car accidents but overlook why-men drive more miles per year on average than women. That fact accounts for the higher accident rate among men than that of female drivers of the same age group.

In spite of the relevance of the number of miles driven to collision involvement, auto insurers charge adult men and women the same annual car insurance premiums, which means that women, on average, pay more per mile to insure their vehicles than men do.

Low-Mileage Discrimination

Of course, car insurance discrimination doesn't just apply to women; it affects anyone who drives fewer than the average number of miles driven per year. The only way to stop auto insurance discrimination against women and other low-mileage drivers is to charge rates on a per-mile basis according to individual odometer readings.

MileMeter, an auto insurance company in Texas, is the first insurer to do exactly that by charging per-mile rates to the number of miles reflected on the odometers of individual vehicles, thereby guaranteeing rate parity for men and women. As a matter of fact, MileMeter is the only insurer in the U.S. to offer pay-by-the-mile car insurance without requiring the installation of vehicle-tracking devices that compromise privacy. Each insured mile is purchased in advance, tacked on to the odometer, and customers purchase additional miles online as needed. Per-mile premiums are only based on ZIP code, driver age, and vehicle type, allowing policyholders to finish the online auto insurance quote process in as few as five minutes.

An Equitable System

"MileMeter seeks to provide coverage for drivers in a fair, affordable manner," explained Chris Gay, MileMeter CEO and president. "Drivers should be in control of what they pay, instead of relying on coverage rates determined by things beyond their control like gender."

"For decades, auto insurance companies have been using stereotypes as proxies for group average miles instead of using each car's odometer to measure miles driven exactly," explained Dr. Patrick Butler, the director of the National Organization for Women's (NOW) Insurance Project. "NOW is gratified that MileMeter is the first insurance company to stop pitting driver groups-especially women and men-against each other."

Typical auto insurance companies overcharge policyholders who drive the fewest miles annually, especially female drivers, elderly drivers, and low-income drivers. On average, female policyholders drive approximately 6,000 miles fewer than their male counterparts in one year, yet they pay almost twice as much for insurance per mile.

MileMeter's pay-by-the-mile pricing has the potential to save drivers 25-75 percent on typical auto insurance policies. Female car owners can expect to save an average of $200 annually.