A New Pay-Per-Mile Insurance Company Just Secured Some Impressive Funding
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Pay-per-mile insurance is gaining ground in the auto industry. Driving habits have changed during the COVID-19 pandemic, and many people are looking for ways to save money if they’re driving less.
Pay-per-mile or usage-based car insurance is expected to be more tailored to each individual driver. As these policy options become more popular, many companies are jumping on the opportunity to capture this new market.
This includes Just Insure, a pay-per-mile insurance tech company that uses telematics to reward safe drivers and reduce bias in the insurance process.
Pay-per-mile insurance could be the newest trend in the auto industry.
Just Insure snags $8 million in funding
Insurance Journal reported that Just Insure has raised $8 million, bringing them up to an impressive $15 million in total funding. So far, only Arizona drivers can purchase the company’s policies, but Just Insure has plans to expand into other states.
According to Insurance Journal, the company’s policy adoption rate has skyrocketed since last year. They’ve issued over 1,000 new policies in the second quarter of 2021, 10X the number from the same period in 2020. Just Insure has also seen a revenue increase of 1,400%.
Drivers are looking beyond traditional models for buying car insurance and seeking more affordable and customized options.
How does Just Insure’s pay-per-mile car insurance work?
Just Insure’s telematics-based model uses data collected from the car and driver to evaluate the appropriate rates for customers. It disregards more traditional factors in assigning rates, like demographic, credit, or zip code information, and focuses solely on actual driving habits. Safe drivers are rewarded with lower rates.
Policyholders are given a 30-day policy and can spend as little as $30 for coverage for the month. They’re only charged for the miles driven. The company uses telematics to collect drivers’ data and determine if they’re eligible for safe driver discounts.
The rate is adjusted monthly based on this data collection. Just Insure claims that this model can save customers up to 40% on car insurance.
This insurance model reflects an industry-wide trend
In the pay-per-mile model, car insurance rates are adjusted as more information is gathered about your driving habits. This is a major departure from the typical insurance process, which automatically puts drivers into buckets based on factors like their age and gender. Customers looking for an insurance option that eliminates any potential bias may prefer the pay-per-mile model.
This is reflective of a broader trend in the industry to curb potentially discriminatory practices. States are working to ban credit checks for determining car insurance rates since this can disproportionately affect poor communities and minority groups.
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