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Could consumers profit from per-mile insurance rates?Posted On Mon, December 10, 2012
Low-mileage drivers may have found a way out of flat annual insurance rates, according to a recent report from an industry analyst.
In the past, drivers who spent very little time on the road were able to get a lower rate than those who drove every day, simply due to the lowered risk to their vehicles. Now, however, some insurers are offering a per-mile insurance rate, allowing drivers to have complete control over how much they pay every year.
MetroMile, a recently-founded auto insurance provider based in California, is now offering policies to consumers for the low rate of 4.1 cents per mile. According to founder and CEO Steve Pretre, the new rating system is intended to reward car owners who drive very little and opt for other means of transportation in the name of conservation.
Traditional car insurance rules are still in place, of course. Drivers who go a little too quickly or frequently get into fender-benders will pay more. Additionally, the service is currently limited to car owners who drive less than 10,000 miles per year. Policyholders plug in a metronome that measures mileage and transmits information to the insurer.
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