“It gives our customers the freedom to control their insurance expenses by how much they drive and how safe they drive,” said Teresa Scharn, Nationwide’s associate vice president of personal line product development.
Nationwide joins other firms including Allstate that offer insurance by the mile. Such programs are ideal for drivers who use public transportation; work from home or live near work, or are college students or retirees; use ride-sharing services; or own secondary vehicles that are driven infrequently.
It also provides an idea of how Nationwide, at least for now, is looking at how drivers will be insured in the move toward self-driving cars in the years ahead.
Scharn said Nationwide believes the switch will happen gradually so drivers can buy coverage for the times they are in control of the vehicle.
“It gives us the ability to calculate rates if the driver is driving the vehicle or if the vehicle is driving that vehicle,” she said.
So far, SmartMiles is available only in Illinois. Nationwide plans to roll it out in nine other states this year, including Ohio, and extend it nationwide in 2020.
How much drivers will save compared with a traditional insurance policy is hard to say, but in general, those who drive fewer than 10,000 miles per year have a good chance of saving money, Scharn said.
There are no contracts for the program. If driving patterns shift, drivers can return to more traditional coverage.
Nationwide will track the miles driven through a device drivers plug into the car’s diagnostic port, typically under the steering wheel. They also will get a discount for driving safely.
Every month, Nationwide will send a bill based on the miles driven the month before, and owners can track billing online.
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