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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


January - March 2013 Update

King County's Mileage Based Auto Insurance Project (MBAI) is in discussions with a different insurance company that responded to the County's RFP. These conversations will determine if the County can enter into contract negotiations to pursue the study. The company would file appropriate filing documents with the Washington State Office of Insurance Commissioner (OIC) and would be prepared to collect and analyze data that would assess behavior change associated with a mileage based insurance. The preliminary discussions are trying to understand how much of the product can be adapted to the study design and how much are core elements of the product and will need to be left in place. These issues affect the official filing with OIC, sound actuarial practices, the companies marketing and data collection capabilities. It is anticipated that next steps will become clear in the next quarter.

For More Information Contact

Ref Lindmark
Transportation Planner
King County Metro Transit
Phone: (206) 684-1104

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