Tuesday, November 8, 2016

Fitbit Takes on Mileage

     The article “Fitbit For Your Car: Insurer Metromile Tracks Your Mileage And Bills Accordingly” discusses how an insurance company uses usage-based insurance to gain a competitive edge. Metromile tracks the distance a car goes through a device plugged into a car’s diagnostic system and sends to the company by cell network. After reading this article I became intrigued on how beneficial this is to the consumer and company as a whole.
    Insurance companies charged an obscene amount for car insurance and most cars do not utilize it enough. In the state of Maryland the average annual car insurance rate is $1,810, with the highest amount going to those from sixteen-eighteen years old (nerdwallet). Although well know insurance agencies are adding this system into their plans, Metromile has a competitive edge. Metromile only calculates the miles driven and does not penalize drivers for speeding or reckless driving. When purchasing car insurance for a new driver, Metromile may be the right choice considering the average price for young drivers and their history of car accidents. The only time someone does not get charged is if they are driving over 150 miles on any given day. 150 miles is unrealistic considering the average amount of miles is 29.2 in a day (newsroom). These 150 miles are only available in select states like California, Illinois, New Jersey, Oregon, Pennsylvania and Virginia. It is 250 miles in the state of Washington (newsroom). Metromile also has an app that can track the data take from your driving and tell you the overall mileage and health of your car (nerdwallet).
    Some issues I thought of when reading this article is about privacy. It may be eerie for some to know that their insurance company is tracking every move they make with their car. This is data that is automatically stored in their system and can be used against customers any time. Many may have a problem with this considering traditional insurance companies are not aware of every literal move you make. There may become a point where this tracking insurance will go too far and begin to use it against their customers. As Metromile becomes more and more popular we may see a changed in their plans. I feel that Metromile can’t last on charging per miles alone and may have to start adding in speeding, reckless driving, and location of driving into premiums. With the ever evolving using of data, more and more insurance companies will switch to usage-based insurance. Consumers are all about getting the best value and will find a way around not having to pay for their miles. How does the company know if their device is getting unplugged during driving? This is something that may cause the company to charge for more than just miles. Overall I feel that usage-based insurance is something that can be very beneficial to drivers. This is a video I found that talks about Metromile. http://www.forbes.com/sites/laurengensler/2016/11/07/metromile-pay-per-mile-car-insurance/#1c6d44404046
http://newsroom.aaa.com/2015/04/new-study-reveals-much-motorists-drive/ https://www.nerdwallet.com/blog/insurance/reviews/metromile-review/


  1. This is an interesting article because the idea of "Pay Per Mile" is something that the majority of insurance companies do not use. This form of insurance is generally too risky for the insurance company. By not accounting for multiple variables it could present great issues later on in the company. Like Sheila said the company eventually will have to start taking into account speeding, recklessness, and location. If there was a good way to find a balance between all the variables it may be both beneficial to consumers and the company. I know currently some insurance companies offer a reduction in insurance cost if customers install their version on a data transmitter in order to determine safe driving habits. Possibly this is something that can also be used to create a better safer system. If customers were only charged by the amount of miles they drove they would have a lot cheaper insurance policies and this would make everyone happier. However, the coverage would probably be much less and not as all encompassing to ensure that in the event of an accident the customer would be covered and only have a low deductible. I believe that this article is relatable in the effect that as college students we currently have higher insurance rates and looking for the best coverage can be hard sometimes. It wont be until we are 25 that we will see the cost of insurance drop significantly.

  2. I think that the idea of insurance taking on a more "pay per mile" structure could be very beneficial to some groups of people, specifically with college students. Often times, younger groups of people are charged with a higher premium for insurance because they are considered to be more of a liability. However, for most college students, we often don't bring our cars with us on campus, which means 9 months out of the year we aren't driving very much, but we still have to pay insurance. So the concept of paying per mile for insurance would be much more beneficial to college students so that they aren't paying so much for insurance during the school year when they are barely driving.
    As Sheila mentioned, eventually, Metromile will need to take into account speeding, reckless driving, and car accidents when quoting prices for insurance rates. I think that a lot of people tend to drive safer when they take into consideration how their driving will effect their insurance rates. So by Metromile not taking these factors into consideration with insurance rates, drivers are more likely to drive recklessly if they know it won't effect how much they pay for insurance.
    In terms of Metromile being able to track how many miles you are driving each day, it certainly does raise questions of privacy. It is a bit scary to think that your insurance company has so much data on you, down to the miles you are driving each day. This aspect of Metromile could be a factor that the average consumer will not be able to get past and could keep consumers from wanting to use Metromile as their insurance provider. Perhaps Metromile could rethink their structure by using a miles per week or miles per month so that it does not seem as invasive as a day to day tracker. On the other hand, if Metromile targets new drivers and their parents, then parents might be more inclined to use it because they (the parents) will be able to keep close tabs on how/ where their child is driving each day. If parents are able to track this with the Metromile app, then perhaps this feature could be seen as a positive, safety feature for a parent's peace of mind rather than an invasion of privacy.


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