Per-mile insurance launched in America - the future of motorcycle cover?

A new type of motorcycle insurance has been launched in America by VOOM & Markel, which charges riders per mile that they ride.

Yamaha Tracer 9 GT riding

A worlds first insurance policy has been launched in America by insurtech firm VOOM, which charges you per-mile you ride (as opposed to a set monthly/yearly premium). 

This is huge news for those who may be casual riders, those who own far too many motorcycles, and those of us without a crystal ball who have literally no idea how much we'll end up riding in the coming year. 

With a base monthly rate and per-mile cost on top, this could genuinely change the way we think about insuring our vehicles.

Research conducted by VOOM found that “the risk associated with low-mileage riding can be more than 80% lower than that of high-mileage motorcycling, but traditional insurance policies are annual across the board.” A per-mile policy will enable riders to keep their motorcycles insured for the entire time they are not on the road, keeping insurance costs low for those who may wait for peak conditions to venture out on their beloved.

As it stands in the UK, riders who insure their (sometimes idle) bikes will either have to SORN it and request lay-up policies, which can offer limited cover, lead to policies being cancelled and re-started mid-term (so say goodbye to your no claims discount being earned), or forbid riding entirely.

Per-mile insurance introduces the flexibility of being able to pay for the time you ride, rather than a predetermined fee. 

How does per-mile insurance work from VOOM? 

There’s no black box or app keeping track of mileage and riding habits, instead riders are simply asked to submit a photo of their odometer on starting the policy, and then up to monthly following that. 

Prices will naturally vary from rider to rider, based on the standard characteristics including bike make and model, rider history and ‘risk profile’ 

As it stands, the per-mile policies are available in Arizona, Illinois, Indiana, and Ohio. 

In the press release, CEO and Co-Founder of VOOM, Tomer Kashi, said: “We are excited to be providing motorcyclists with flexibility through this per-mile motorcycle insurance product,” 
“Enabling cost-effective insurance options for riders and drivers is our top priority. We look forward to spurring further growth across mobility, particularly in otherwise overlooked parts of the industry.”

Jeff May, Executive Underwriting Officer, Markel, said: “We’ve been providing specialized motorcycle coverage for years, and due to the seasonality of the motorcycle riding season, this is a natural progression in the evolution of motorcycle insurance.

A few questions we had were answered:

With a new policy, would you pay anything up front to start the policy, or is it all purely based on usage of bike per month?

You pay a basic, low, fixed monthly rate plus per-mile costs. 

How much is this per-mile insurance coverage per policy, on average?

Just like any other insurance, it depends on many factors like age, experience, motorcycle type, requested coverage (third party liability, comprehensive etc)
We have a customer in our pilot that pays $5 per month for a base coverage and others that pay much more.

What happens if someone doesn't submit their monthly reading?

Riders take their first reading at policy inception, but if they forget afterward, there's no harm. We'll charge a default mileage sum, and when they take a picture later down the road, we will make the adjustment accordingly.  
We also have a mileage cap so that we don't charge above that amount.

Is there any indication of this being available in the UK/Europe going forward?

There are no immediate plans but we follow all markets closely.

Would you, dear Visordown reader, like to see per-mile insurance more common?

If this goes well, we’d love to see a per-mile insurance policy type being introduced in the UK. It just makes sense, if you’ve got a handful of bikes that you share time on, it’s difficult to know which ones you’ll ride the most in the coming year. 

Introducing this flexible option for a policy just makes sense - and I used to work in motorcycle insurance!

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