By Miles is a UK based startup that offers pay-per-mile car insurance using a black box and mobile app. By Miles members just pay a small subscription fee to cover fire and theft while the car is stationary. Post that, each trip is logged and charged via a monthly statement – true usage based insurance.
According to the By Miles team, drivers that drive less than the average motorist currently subsidise the premiums of high mileage drivers. By Miles wants to address this with pay-per-mile product in the UK market. With By Miles, you will only be charged for the exact number of miles you drive.
James Blackham, the company’s co-founder and CEO has outlined By Miles’ premise: “Consumers shouldn’t have to pay full price for insurance when they aren’t using their car – if they’re on holiday or taking public transport to work, for example. We’re doing it differently by treating our customers as individuals, building real-time policies that fit around them.”
It is worth noting an inherent paradox in pay per mile policies. Although low mileage drivers pay lower premiums, this also lowers the revenue per policy that insurers generate. However, the added market share acquired through next generation product lines such as usage policies can offset the lower revenue per customer.