By Miles Launches Pay-As-You-Drive Car Insurance

For the first time in the UK, drivers will be able to buy car insurance in real time on a pay-as-you-go basis with the launch of the new By Miles policy.


By Miles will charge car owners a fixed annual fee to cover their cars while parked, then bill them monthly, based on the number of miles that they actually drive. It’s being described as the biggest shake-up to the insurance sector since insurers started selling directly to motorists more than 30 years ago. The product, which measures miles in real time, is being aimed at city dwellers and other drivers who travel under 7,000 miles a year or 140 miles per week in their cars. It will also reveal to motorists the true cost of car journeys, allowing car owners to decide whether or not to take their vehicle, with potential benefits for the environment and for public health.


The pay-as-you drive insurance, likened to mobile phone billing, could save drivers up to hundreds of pounds each year as the cost of motoring and car insurance continues to climb. Charging for the distance travelled is also a fairer way to charge motorists for insurance, as drivers increasingly mix modes of travel including public transport, bike and walking. More than 4,000 drivers are currently on the waiting list for the pay-by-mile policy after startup By Miles ran a successful trial with over a hundred UK drivers last year.


Annual charges will start from £150 a year and driving will be billed from 3p a mile. Using this example, someone driving 4,000 miles a year with this policy would pay £270 for a year’s fully comprehensive cover. The less they drive, the less the car owner would pay. As with traditional motor insurance, rates will vary according to model and age of car, driver’s experience and where car is parked. To get started, customers simply plug the matchbox-sized Miles Tracker device into their car, which will accurately measure the distance travelled and relay it to a smartphone or computer within minutes of a journey being completed. By Miles measures only how far a car is driven, not how it is driven – setting it apart from many existing telematics car insurance products.

Potential customers can get a quote online and the fully comprehensive policy includes No Claims Discount protection, personal accident cover, courtesy cars, uninsured driver cover, misfuelling cover and replacement key cover – items that drivers normally pay extra for. The By Miles smartphone app also gives drivers other reminders and tools, to help make owning a car much easier, including MOT and Car Tax reminders.


James Blackham, co-founder and CEO, said: “Car insurance is a product that’s barely changed in 30 years. We want to make car insurance fairer, and the whole experience of owning a car much easier. Every extra mile you drive adds to the risk of an accident. We think it’s high time that this is reflected in the price infrequent drivers pay. I’ll know we’re getting somewhere when one of our customers walks into the pub and tells their friends ‘You know, I really love my car insurance’.”


Callum Rimmer, co-founder and CTO, said: “We’re determined to create a more relevant product for customers, as the way we drive changes. While our policies work well for low mileage drivers today, they can be adapted as car use evolves, with the rise of autonomous or shared vehicles. We want By Miles to be the dominant insurer in the brave new world of motoring that’s just on the horizon.”


By Miles insurance is underwritten by AXA Insurance UK Plc and has received funding from InMotion Ventures, Jaguar Land Rover’s innovation fund. Insurtech Gateway, the insurance-focussed incubator set up by investor Hambro Perks and Lumleys, is also an early investor.


Robert Lumley, director at InsurTech Gateway, said: “It’s clear that paying for insurance by the mile really addresses customer needs and we’re delighted to be supporting By Miles, alongside other visionary investors. Telematics that tracks behaviour naturally benefits the insurer, but paying by mile naturally benefits the customer. We hope that getting this simple but revolutionary idea out of the starting blocks, in the face of an industry that is often resistant to change, will lead to other product and service innovations from By Miles. Driving and car ownership is changing rapidly and the insurance industry as we know it will soon get left behind.”


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