By Miles offer car insurance savings as rates hit the roof

18 July 2017, 15:70   By Samantha Smith

BY MILES will be offering drivers the UK's first ever pay-per-mile car insurance policy, at a time when premiums have since their fastest ever annual rises.

car insurance cover
Credit: IgorAleks/

To be launched at an unannounced date later this year, the policy will require drivers to install their cars with a black box, which will record the distances they travel and charge them by the mile.

This approach comes as a novel solution to the worsening problem of rising insurance premiums, which the Association of British Insurers (ABI) recently warned had risen by 11% in the last year, the highest rate since records began being taken five years ago.

However, given that the policy and the app are aimed more at motorists who drive less than the average number of miles each year, those who make particularly regular use of their cars should consider the possibility that they might not save on the deal By Miles are offering.

Black box and an app

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While it's still not entirely clear when exactly the policy will launch later this year, the details of just how it will work have already been well established by By Miles.

Not only will customers be given a telematic black box that records and transmits their miles, but they will also be given a smartphone app, which lets them know how much they've travelled and how much they're likely to pay in any given month.

And on the subject of months, another novel feature of the policy is that it requires a monthly subscription, rather than a premium that has to be annually renewed.

In theory, this will give customers more flexibility and convenience, although it should be noted that the monthly subscription fee is payable in addition to the fees for every mile a customer drives in a single month.

As such, those who subscribe may need to be less frequent drivers, suggesting that the policy will perhaps be aimed more at younger motorists who aren't absolutely reliant on their cars than at professionals who drive to and from work everyday.

Still, By Miles say that their policy provides opportunities to make savings, since it promises to lower the pay-per-mile rates of drivers automatically so long as they drive safely each month.

In other words, the policy combines two innovations rather than one: a pay-per-mile insurance premium, but also black box recording technology, which has previously been used on its own to reward safer drivers with lower premiums.

In combination, these two have the potential to offer considerable savings to the right drivers, with By Miles' CEO and founder James Blackham having the following to say about the benefits of the upcoming premium:

"Right now insurance is 'all you can drive' but in this modern age that doesn't necessarily make sense, especially if you're driving less than the average number of miles in each year, which is about 7,500".


Indeed, given that typical car insurance premiums have been rising precipitously over recent months (if not over recent years), By Miles' new policy will come as a welcome relief to certain drivers.

That's because, after the discount rate applied to insurers was cut from 2.5% to minus 0.75% earlier this year, things were made even worse for premiums when the Insurance Premium Tax was increased from 10% to 12% at the beginning of June.

This dramatic increase drives home how important it is the Government press ahead with a new framework for the Discount Rate and call a stop to further hikes in Insurance Premium Tax
Huw Evens, ABI

Together, such changes have resulted in a record 11% annual rise in the cost of car insurance premiums, with the average yearly bill amounting to £484, according to the ABI.

It's primarily for this reason that By Miles' upcoming premium will be of interest to more casual drivers, even if its costs haven't yet been disclosed by the new insurer.

Of course, for those who drive more than the 7,500 miles flagged up by Blackham as the distance the average motorists drives per year, they may have little option but to continue facing up to rising annual premiums.

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