Mile Auto Innovates with Privacy-Focused Usage-Based Insurance Model

July 3, 2024

Founded in 2019 by Fred Blumer, Mile Auto offers a unique approach to auto insurance within the insurtech industry. Unlike traditional telematics-based models that use high-tech tracking devices, Mile Auto operates on a simple and privacy-centric method where policyholders provide pictures of their odometer readings. This novel approach preserves customer privacy while delivering a straightforward and user-friendly experience. Available in six states—Arizona, Florida, Georgia, Oregon, Tennessee, and Texas—Mile Auto is transforming the landscape of auto insurance.

The Philosophy Behind Mile Auto

Customer Privacy and Data Protection

Fred Blumer established Mile Auto with a strong belief in protecting telematics data and respecting consumer privacy. Heavy data collection by traditional telematics devices often raises privacy concerns among consumers. By opting for a less invasive method, Mile Auto allows customers to participate without compromising their personal data. When policyholders receive a text or email reminder, they submit an image of their odometer, which Mile Auto processes to extract necessary information while ensuring data authenticity. This approach aligns Blumer’s philosophy with a broader industry trend where consumer privacy is becoming increasingly significant.This innovative method circumvents the intrusive nature of conventional telematics devices, which often continuously track a vehicle’s every movement. Mile Auto’s system provides users with peace of mind, knowing that their location and driving habits are not being constantly monitored. The simplicity of submitting an odometer reading adds to the appeal for consumers who might feel overwhelmed or uneasy about the extensive data collection practices of other insurance providers. This emphasis on privacy not only attracts customers who are skeptical of telematics but also sets a new standard within the insurtech industry for respecting consumer data.

Simplified User Experience

Mile Auto’s approach simplifies the end-user experience. Customers, who may not fully understand or feel comfortable sharing extensive telematics data, appreciate a model that is transparent and easy to navigate. This simplicity aligns with a growing trend within the industry, where consumer awareness and data privacy are increasingly prioritized. By streamlining the interaction with policyholders to merely taking a picture of their odometer, Mile Auto breaks down the perceived barriers between the insurer and the insured, making the insurance process more accessible.The user-friendly experience of Mile Auto’s service is particularly attractive to those less tech-savvy or those who prefer less digital intrusion in their personal lives. No specialized devices need to be installed in a vehicle, no intricate software to manage; just a straightforward, minimal-effort system that provides the necessary data to determine insurance rates. This level of user-friendliness not only enhances customer satisfaction but also expands Mile Auto’s market reach to demographics that might otherwise shy away from technology-heavy solutions. It offers a refreshing alternative in an industry that has seen a surge in high-tech, and often, high-intrusion insurance solutions.

Unique Pricing Model

Base and Per-Mile Rate Formula

Mile Auto employs a pricing model similar to utility billing systems, featuring a fixed base rate plus a charge per mile driven. Fred Blumer explained that this model primarily benefits customers who do not drive frequently, potentially leading to significant savings on auto insurance costs. For example, a base rate of $34 combined with a 4.6 cents per mile rate allows customers to see a direct financial benefit from driving less. This model is particularly advantageous for those who use their cars infrequently, such as retirees or remote workers, making auto insurance more affordable and aligned with the actual use of the vehicle.By adopting a usage-based pricing model, Mile Auto incentivizes responsible driving and judicious use of personal vehicles. This not only promotes environmental consciousness by potentially reducing mileage but also aligns with the modern consumer’s desire for cost-effective, value-driven services. The transparency of knowing exactly how one’s driving habits affect their insurance bill each month is empowering for consumers. They can make informed decisions about their driving frequency, aware that they are in control of their insurance costs directly linked to their usage.

Example Calculation

An illustrative calculation demonstrates the potential savings: considering a base rate of $34 and a per-mile charge of 4.6 cents, a customer driving 500 miles in a month would incur a total bill of $57. This flexible pricing model caters particularly well to low-mileage drivers, offering a financial incentive for reduced vehicle use. Consumers who drive fewer miles thereby see a tangible reduction in their insurance expenses, directly correlated with their vehicle usage.This example underscores the appeal of a no-frills, pay-as-you-go insurance model that adjusts dynamically according to the driver’s needs. Unlike traditional insurance models that offer fixed rates regardless of mileage, Mile Auto’s approach is straightforward and fair. Low-mileage drivers, such as urban dwellers who primarily use public transportation or those who carpool, stand to benefit the most. The resultant savings can be substantial over time, making it an attractive option for those looking to reduce their regular expenditures without sacrificing insurance coverage.

Industry Experience and Early Partnerships

Fred Blumer’s Background and Experience

Blumer’s previous roles at Vehcon and Hughes Telematics (now Verizon Connect) have informed his stance on minimal data collection and customer privacy. His experience in the telematics field shaped the foundation for Mile Auto’s less intrusive approach. Blumer contends that despite the current willingness of some consumers to share extensive data, they might regret this in the future, thereby positioning Mile Auto as a forward-thinking, privacy-respecting alternative. His extensive background provided the necessary insights to create a balanced approach that combines the benefits of telematics with a strong emphasis on privacy.Fred Blumer’s foresight into the evolving consumer landscape highlights a crucial aspect of developing modern insurtech solutions. As people become more aware of data privacy issues and the long-term implications of data sharing, Mile Auto’s model offers a sustainable alternative. This approach helps to build trust and loyalty among customers who are becoming increasingly cautious about who has access to their personal information. Blumer’s extensive experience assures consumers that Mile Auto is led by an expert who truly understands the evolving nuances of the industry.

Partnership with Porsche

One of Mile Auto’s early and notable market introductions was a specialized insurance product for Porsche buyers. Partnering with Porsche headquarters in Atlanta, the bespoke insurance product offered unique features such as agreed-value coverage, Porsche replacement parts, and concierge claims services catered specifically to luxury vehicle owners. This partnership highlighted Mile Auto’s capacity to develop targeted offerings for niche markets. The customization and attention to detail in this product set a precedent for possible future collaborations with other high-end automotive brands.This collaboration with Porsche not only broadened Mile Auto’s market reach but also demonstrated its ability to cater to the unique needs of high-value vehicle owners. The bespoke product tailored specifically for Porsche buyers indicates that Mile Auto can customize its offerings effectively, appealing to discerning clients who seek premium, personalized services. The success of this partnership showcases Mile Auto’s capacity for developing innovative insurance solutions that are both flexible and responsive to specific market demands, reinforcing its position as a dynamic player in the insurtech space.

Potential Future Applications

Expansion into Commercial Lines

While Mile Auto’s current focus is on personal auto insurance, Blumer acknowledges the potential for future commercial applications. For instance, commercial vehicles used by roofers, who often leave their vehicles at job sites for extended periods, could benefit significantly from Mile Auto’s low-mileage insurance model. This application aligns with Mile Auto’s philosophy of rewarding lower usage with lower costs. The adaptability of Mile Auto’s solution potentially opens up new markets within the commercial vehicle sector, where insurance needs can vary greatly based on usage patterns.Commercial vehicles typically incur insurance costs based on assumptions of constant use. With Mile Auto’s model, those businesses that use their vehicles less frequently than the industry norm can finally see a reduction in their insurance premiums, proportionate to their actual usage. This could translate into significant savings for companies, particularly smaller enterprises that might operate on tight budgets. The ability to offer an insurance solution that matches real-world usage is a game-changer, one that can revolutionize how commercial fleet insurance operates.

Future Growth Prospects

Founded in 2019 by Fred Blumer, Mile Auto brings a revolutionary approach to the auto insurance sector within the insurtech industry. Diverging from traditional telematics-based systems that rely on advanced tracking devices, Mile Auto employs a simple, privacy-focused strategy. Instead of invasive technology, policyholders merely submit photos of their odometer readings to determine their premiums. This innovative method not only upholds customer privacy but also offers a seamless and hassle-free user experience. Mile Auto’s services are currently available in six states—Arizona, Florida, Georgia, Oregon, Tennessee, and Texas. By focusing on simplicity and privacy, Mile Auto is redefining how auto insurance operates, making it more accessible and user-friendly. This fresh perspective on insurance acknowledges the evolving needs of modern drivers who prioritize both ease of use and personal data security. As Mile Auto continues to expand, it stands as a testament to the power of innovative thinking in transforming established industries.

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