Insurance by the Mile

Milemeter is a Dallas-based startup that will let you buy insurance by the mile and is aiming for a May 1st launch, and has already received regulatory approval in Texas. Other companies have piloted programs that offer discounts for driving-per-mile, but I don't know of any other insurers in the states that have sold insurance by the mile. There may be some, but not that I'm aware of.

Paying for auto insurance by the mile is an incentive to drive less and rewards those that do not drive as much. Why should someone that drives 5,000 miles a year pay the same price as someone that drives 20,000 miles a year. Paying for gas, you pay depending on how much you drive, and so paying for insurance by the mile makes sense.

To determine if you would save money on pay per-mile, you can look at how much you drove last year, which would give you a good idea how much you would be driving the next year, and multiple the cost per mile and how much you drove. Then you could see the differences in price of a regular policy.

In January 2002, Texas became the first state to explicitly permit per-mile insurance. State regulators must approve the type of insurance policies that insurers offer, and in many states current regulations would not allow pay by the mile policies. Currently, there may be other states that permit per-mile, but I don't know which ones.