VPP Projects Not Involving Tolls
Category: Projects that Make Auto Use Costs Variable
Project - WASHINGTON: Mileage Based Automobile Insurance in Seattle
Proposals were solicited for an insurance company partner and Unigard was selected from four applications. Unigard Insurance Group is headquartered in Bellevue, Washington and offers car insurance in seven states. Washington State and King County, Washington also set aside some of their own funds to support a pilot project, and together with Unigard, are offering total matching funds of $4,506,000. This pilot will install the field-tested Intelligent Mechatronic Systems' iPAID global positioning system (GPS) mileage recording devices on a sample of approximately 1,100 vehicles, collect baseline data needed to model the options for a PAYD premium structure, select the best premium structure, and roll out and test it in the State of Washington. The study has both a pre-implementation and implementation phase.
The study design has been modified. The revised proposal will lead to the implementation of PAYD insurance in Washington State at an earlier date. Unigard will utilize both vehicle history data from over 4,500 participants that provides odometer information and iPAID technology to verify odometer readings and examine driving behaviors from a data base of current insurance holders. The company will also recruit new participants to the PAYD pilot. Using the larger data base, they will identify the potential markets for mileage based insurance and, if feasible, implement the product at an earlier stage than originally planned. The use of technology and vehicle history data will allow comparison and calibration of odometer readings and estimates of driving behaviors by different markets i.e., age, education, time of driving, land uses. It will also look at marketability of PAYD to various populations i.e. suburban, urban and rural.
Throughout the study, a sample of vehicles will be measured using the iPAID technology to verify odometer readings, assessing the miles driven and measuring driving behavior such as braking and acceleration patterns. The actual mileage based insurance product will be examined in a pre- post- study. The PAYD pilot anticipates installing 1,100 iPAID machines in participant vehicles.
Participants will be surveyed for commute behavior, customer satisfaction, changes in travel modes and travel behavior, use of transit or HOV modes, and intentions to continue with their current insurance policy. Participants will receive discounts for participating in the PAYD pilot. The PAYD pilot will also examine pricing and billing models. PAYD insurance enables substantial consumer savings and has been estimated to lead to between a 9 to 20 percent reduction in driving, with commensurate congestion reduction and air quality benefits. The PAYD pilot will also develop estimates of emissions reductions.
Pre-Implementation Funds Awarded
Anticipated Completion Date
October - December 2012 Update
King County's Mileage Based Auto Insurance Project (MBAI) is continuing to review procurement and other issues following the withdrawal of PEMCO Insurance Company from negotiations for a MBAI contract. Given the unique nature of this project and the limited responses from the last RFQ process, project managers are advocating to move forward with the other respondent. The preliminary discussions with that vendor have been optimistic however there continues to be questions around how the vendor will work with Washington State Office of Insurance Commissioner.
For More Information Contact
King County Metro Transit
Phone: (206) 684-1104
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