Fred Blumer believes in an old-fashioned approach to telematics.
Blumer, CEO of Mile Auto, founded the usage-based auto insurance MGA company in 2019, confines the information collected from policyholders to odometer readings. Users submit pictures of their dashboards, rather than having to consent to high-tech tracking of vehicle activity.
"We're not in the hardware business," Blumer said. "We don't have to get somebody to download an app. And it's a very clean data set. We're not collecting all kinds of privacy-intrusive data. Customers really seem to like it."
Mile Auto is available in six states: Arizona, Florida, Georgia, Oregon, Tennessee, and Texas. Its customers receive a text or email with a link to click to collect a picture of their odometer. The company's technology can then extract the year, make and model of the car from that photo, along with the mileage. It can also scrutinize the image to ensure the mileage numbers are not altered.
Verifying mileage numbers avoids the human tendency to misrepresent average annual mileage to get a lower insurance rate, Blumer observes.
Mile Auto does account for driving and claims history along with mileage. Its rates have two parts. First, a base rate fixed for the policy term, plus a few cents per mile rate assessed for the prior month's mileage. "The amount paid by customers each month will vary based on the number of miles they drive in the prior month. It's kind of like your electric bill – the less you use, the less you pay," Blumer said. For example, a monthly base rate of $34, paired with 4.6 cents per mile, for a driver who logged 276 miles in a month, would add up to a monthly bill of $46.70.
Blumer's previous experience in the insurtech space includes leadership roles with Vehcon, a connected vehicle data company, and Hughes Telematics (now known as Verizon Connect after being acquired). While in these roles, he came to believe that telematics data should be protected, and consumer privacy should be respected. This is why Mile Auto doesn't base its measurement on in-vehicle telematics devices.
"A lot of people say, well, consumers don't care, they're happy to share their data," he said. "Maybe so, because they may not understand what they're sharing. And in the future they may not be happy about it. And so we just think it's a good option."
Early in Mile Auto's development, the Atlanta-based startup partnered with Porsche, which has its U.S. headquarters in Atlanta. The automaker had been studying the insurance market and approached Mile Auto to collaborate on an offering for Porsche buyers. The companies collaborated to develop a product including agreed value coverage, Porsche replacement parts and concierge claims services.
"Porsche Auto Insurance was our first product to market," said Blumer, who also serves as CEO of Porsche Auto Insurance, which is a subsidiary of Mile Auto. "It is truly a program designed specifically for Porsche owners to meet their unique needs."
For now, Mile Auto plans to stay focused on personal lines auto insurance, but Blumer does see other opportunities for the service. "There's certain classes of commercial vehicles, like roofers, for example. They tend to drive to one place, then the truck stays there for three days. Those typically need low mileage," he said. "The personal lines segment is so huge that it's plenty to focus on."
