COVID-19 shutdowns and lockdowns have changed the way consumers shop for coverage.
Shutdowns across the United States in response to the COVID-19 pandemic have caused interest in pay-per-mile auto insurance. Allstate has watched its registration in this type of car coverage take off since the lockdowns set in.
Allstate’s Milewise lets people pay for their car premiums based on the amount of driving they do.
In this way, customers are able to use pay-per-mile auto insurance to reflect their reduced driving since the start of the pandemic, said Allstate personal property-liability operations president Glenn Shapiro. Last year, the number of cars covered through the Allstate Milewise program was around six times higher than it was the year before. Moreover, there are about four times more policies in the program, some of which provide coverage for more than one car.
This type of policy is among many insurers have been offering to provide flexibility for motorists. Consumers have been seeking coverage that more closely reflect their own driving habits or the distance they actually drive per year. While traditional coverage is for an unlimited number of miles, this suggests a considerably greater risk than is the case for someone who doesn’t do very much driving at all.
The pandemic’s lockdowns have shriveled driving distances, feeding into pay-per-mile auto insurance.
“While the pandemic has certainly accelerated that trend and spiked it for a period of time, I also think there’ll be an element of that that persists,” said Shapiro. “There was a really good business case for pay-per-mile pre-pandemic, and there will be post-pandemic.”
Even though most of the interest in Allstate’s Milewise program is from new customers, it has also been drawing the attention of existing clients who were looking for an opportunity to save money as they reduced the amount of driving they were doing, explained Shapiro.
The Milewise program recently took its first steps into Wisconsin and Oklahoma, bringing its availability to 19 states across the country. It works with a device that plugs into the customer’s car and tracks the distance driven. Certain Ford vehicles already have embedded modems that allow drivers to register for the pay-per-mile auto insurance without the need for an additional device.