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