Results: Votes for Non-Sexist Car Insurance Win 2nd Place

December 7, 2007

We're happy to report that MileMeter, a per-mile auto insurance start-up company that NOW's Insurance Project has been mentoring, won second place (over 900 applicants) in Amazon Web Service's Start-Up Challenge. Why NOW's support? Because charging for insurance in this way is non-sexist, helps the environment, and helps enable lower-income people to retain their cars. In a word, it's fair.

As a result of NOW's support, MileMeter has received a full investment commitment by venture capitalists. CEO Chris Gay credits NOW for this accomplishment and conveys his gratitude.

See the results for all seven finalists and, if you haven't seen it yet, watch the video online. Gay explains how cents-per-mile insurance works.

The first item in the background section below explains in more detail NOW's interest in removing the auto insurance sex discrimination roadblock to a constitutional guarantee of women's equality.

More information and the resources below are at the Insurance Project's website. You can also read about NOW's work on this issue at the NOW website.

Background:

MileMeter Social Responsibility Brochure

MileMeter doesn't discriminate against women--or men.

In each age group, men average more miles and proportionately more accidents than women. Insurers charge youth rates by sex as an estimate of the difference, but adult women charged the same as men are actually paying more per mile. This discrimination--and using driver sex--is ended by using each car's odometer to pay by the mile.[1]

MileMeter doesn't discriminate against lower-income families.

High pay-per-car premiums force drivers in low income zip codes to give up cars. But shifting more miles onto remaining cars increases the average cost per car to insurers who in turn raise premiums. This mileage-premium upward spiral-not less care by drivers-causes the high premiums. MileMeter ends the spiral and lets drivers keep their cars.[2]

MileMeter reduces the number of uninsured car.

By making premiums affordable (car owners can purchase as little as 1,000 miles at a time), MileMeter lowers the cost of buying the car insurance required by Texas law.

MileMeter doesn't discriminate against car poolers and transit riders.

Insurers "earn" pay-per-car premiums every day whether the car is driven or not. Therefore when drivers use public transit they put premium but no miles into their cars' insurance pools and subsidize the costs of cars that are driven daily. MileMeter earns cents-per-mile premium only as the odometer turns.

MileMeter is good for the environment.

Insurance-by-the-mile provides an economic incentive to drive less. This leads to fewer tailpipe emissions, less toxic road runoff, and less demand for road and parking lot construction. Think of it as a way to reduce urban sprawl, improve our air quality, and fight climate change.[3]

Resources:

1. Patrick Butler, NOW Foundation Insurance Project Director. "Automobile Insurance Pricing: Operating Cost versus Ownership Cost: The Implications for Women," Proceedings, Women's Travel Issues Second National Conference, Federal Highway Administration 1996.

2. Patrick Butler. "Why the Standard Automobile Insurance Market Breaks Down in Low-Income Zip Codes: A Per-Mile Analysis." Report to Texas Legislators, July 2000.

3. Todd Litman. "Distance-based Vehicle Insurance as a Transportation Demand Management Strategy." Transportation Quarterly, Vol. 61, No. 3, 1997.