Wrisk partners with RAC to offer Pay by Mile subscription car insurance

The new scheme from Wrisk and the RAC will allow customers to only pay for the miles they drive, setting itself apart from traditional car insurance, which only charges drivers based on mileage estimates without offering refunds to those who drive shorter distances.

Built on a mobile-first platform, the insurance option provides users with a more flexible solution that can be amended and cancelled at any time, while Pay by Mile pricing derives real-time mileage and offers rates that reflect that usage.

To match the preferences of drivers who drive less than 6,000 miles annually, the platform takes into account a combination of actual mileage per month with other signals, such as destination, time of journey, and weather conditions, which users can choose to share.

Wrisk has been able to power the RAC’s Pay by Mile product with monthly rolling, or “perpetual insurance” contracts rather than annual terms, with no interest charged for paying monthly.

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How it works

After paying a one-off activation fee, users of the new Pay by Mile insurance scheme pay a premium that’s split into two parts:

  • the parked premium – a set charge paid at the beginning of each month to insure the vehicle whilst it’s not in use;
  • a per mile premium – a per-mile charge for insuring the car while it’s being driven, which is paid at the end of each month.

Customers receive a drive tag, which is designed to be placed on the windscreen and be paired with a smartphone to record mileage, and policies can be managed securely online or via the Pay by Mile app.

“We are excited to be working with the RAC to launch such an innovative product,” said Nimeshh Patel, CEO of Wrisk.

“UK drivers have been covering fewer and fewer miles over the past years, and Covid restrictions have only accelerated this trend with a significant number of people expected to work from home at least a day or two each week. This means there has never been a more urgent need for a flexible insurance that adapts to people’s lives.

“We’re proud of this collaboration with the RAC and see it as another step in our mission to create a new standard for insurance that makes simplicity, transparency and customer ownership the norm.

“With new mobility trends like autonomous driving, electric vehicles and different ownership models gaining momentum, we want to always be thinking ahead of evolving protection needs – in partnership with both the insurance and automotive industry.”

Mark Godfrey, managing director of RAC Insurance, commented: “Car insurance is a market that’s been ripe for a shake-up for some time, so we’re thrilled to introduce a truly pioneering mobile-first subscription-based product which is ideally suited to drivers who don’t do that many miles.

“Wrisk’s technology is ideally suited to creating a platform that allows our customers to easily access and monitor their car usage and monthly payments. The fast and hassle-free online quote process they developed also makes it easy for drivers to see if they could start saving money with Pay by Mile, and also provides an experience that feels similar to other digital-first services they might use.”

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Aaron Hurst

Aaron Hurst is Information Age's senior reporter, providing news and features around the hottest trends across the tech industry.