Welcome to Ask Clark, a column designed to answer your financial questions, by money expert Clark Howard.
Should I Let My Insurer Track My Driving Habits for Lower Rates?
Raymond from Ohio asks: “What is your take on insurance apps that track driving habits in exchange for lower insurance costs?”
Clark’s Take on Whether You Should Let Your Driving Habits Be Tracked in Exchange for Lower Rates
Clark says: “That’s the trade-off. And you really have to know your driving and how much you’re driving. Some of the apps are sophisticated enough that they take into account what road you’re on and all that. But I think that trade-off has a lot of negative to it.”
“I’m much more excited about an insurance startup that’s only available in a handful of states, Mile Auto,” Clark says.
Mile Auto is an Atlanta, Georgia-based startup that charges you based only on the miles you drive plus a low monthly base rate.
The company’s website offers the following example of how it works:
Fred has a base rate of $48 and a per-mile rate of $0.08. He drove 300 miles this month, so his monthly total is $72 – his $48 base rate plus $24 (300 miles at 8¢ per mile).
Clark says he likes the pay-per-mile concept because the amount of information a company like Mile Auto needs from you is much less than other insurance companies that invade your privacy.
“They’re not doing any of the stuff like, ‘Oh, you drive dangerously, or you drive on this road, or that road or the other one,'” Clark says. “And they say that the number-one indicator other than your historical driving pattern is how many miles you drive. They don’t need to know everything about how you drive.”
Mile Auto is currently available only in Arizona, Georgia, Illinois, and Oregon, but it hopes to expand to other states soon, the company says on its website.
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