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Old 12-11-2017, 08:25 AM
californiakrazy californiakrazy is offline
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Default pay per mile program

Does your company have a pay per mile program for personal auto? what is it like? I am new and trying to figure out questions for a director wanting to discuss this product. if this is something you carry, is it allowed at your state? why or why not?
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Old 12-11-2017, 10:45 AM
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Vorian Atreides Vorian Atreides is offline
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Good luck getting responses about a concept whose implementation is likely to be viewed as highly-proprietary information.

Most companies that have rating that utilizes telematics data will likely have some degree of "rating per mile" type aspect . . . but it will very likely not be as linear as a straight-forward "pay per mile" program.

You might look at industry literature on the use of telematics for some insights (the CAS has a few on the topic).

You might also consider if a strict linear relationship is going to be supported by data. For example, for lower mileage risks, the relationship might be linear (or close enough for rating); but you might get to a point where the increase in risk is diminished with an increase in mileage because the driver/policyholder has "great familiarity" with the roads and traffic patterns.
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Last edited by Vorian Atreides; 12-11-2017 at 10:50 AM..
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Old 12-12-2017, 08:32 AM
californiakrazy californiakrazy is offline
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Quote:
Originally Posted by Vorian Atreides View Post
Good luck getting responses about a concept whose implementation is likely to be viewed as highly-proprietary information.

Most companies that have rating that utilizes telematics data will likely have some degree of "rating per mile" type aspect . . . but it will very likely not be as linear as a straight-forward "pay per mile" program.

You might look at industry literature on the use of telematics for some insights (the CAS has a few on the topic).

You might also consider if a strict linear relationship is going to be supported by data. For example, for lower mileage risks, the relationship might be linear (or close enough for rating); but you might get to a point where the increase in risk is diminished with an increase in mileage because the driver/policyholder has "great familiarity" with the roads and traffic patterns.
Thank you, this was helpful, any resources you (or anyone) can point me to is a great help.
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Old 12-12-2017, 10:42 PM
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Look at the Exam 6 syllabus. There is a paper on usage-based insurance. If you want to learn, read it.
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Old 12-14-2017, 11:12 AM
v10 v10 is offline
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Metromile is pretty close to a legit pay-per-mile program. There is a relatively small fixed premium and the rest is exactly proportional to the miles driven. I assume they have to have a rate filing out there you could learn something from.
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