By Miles targets those drivers who travel less frequently, or clock up low annual mileage. Describing itself as a fairer kind of car insurance for lower mileage drivers, premiums are charged by the distance driven.
Defaqto rating: 4/5 stars
In 2020, By Miles car insurance was awarded a rating of four out of five stars by Defaqto, an independent financial research and ratings company.
Note: Not all Defaqto products with the same star ratings have the same covers and terms.
Trustpilot rating: 4.7/5 stars
By Miles enjoys a 4.7-star rating with Trustpilot, the consumer review website. This rating is based on around 2,400 reviews, with 88% of reviewers rating the company “excellent”.
Customer reviews on Trustpilot focus on the savings for infrequent drivers, with some saying they had reduced their premiums by up to half.
Usage-based insurance (UBI) is a growth sector in the industry. As the UK entered Covid-19 lockdown in March 2020, many companies offering UBI experienced stronger sales as a result of government-imposed driving restrictions forcing many cars to be stood idle for weeks.
By Miles was one such company and it reported it enjoyed its strongest month of sales since its July 2018 launch in April 2020.
By Miles was co-founded by web app designer Callum Rimmer and former Goldman Sachs banker James Blackham in 2015, trading originally as Multas Mentas.
It became the UK’s first pay-by-the-mile car insurer when it began trading under the By Miles brand three years later with seed funding from Jaguar-Land Rover.
Its policies are underwritten by a panel of insurers that include Axa and La Parisienne Assurances and it has sold more than 20,000 policies since launch.
The company estimates there are around 19 million lower-mileage drivers in the UK who could benefit from its pricing strategy, targeting those who drive fewer than 7,000 miles in a year.
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By Miles charges a set price – depending on the circumstances of your car, age, driving history and location – for parking for the year, and a separate charge per mile for when you're driving.
Using the By Miles quick quote calculator I entered my own details in July 2020:
Car model – a 2003-plate European estate
Address – market town in the East Midlands
Age – not saying, but comfortably middle-aged
Experience – 21+ years of safe driving
The calculator set me a parking charge for the year of £171.99, and a price for driving at 3.2p per mile.
Depending, therefore, on how many miles you drive a year, this type of insurance could be a real winner. Here are some pricings charged at the above metrics:
If I drive 100 miles a year – a trip to the local supermarket every fortnight to buy groceries – I pay only £175.19 for the year
If I drive 1000 miles a year – say, a small local commute Monday to Friday – I pay £203.99 a year
If I drive 6000 miles a year – closer to my own annual mileage – it's up to £363.99 a year
If I drive 10,000 miles a year – and By Miles caps its charge at 150 miles a day or 10,000 miles a year – it's up to £491.99
At the lower mileage end, therefore, it looks like quite a bargain. But I know I can get cheaper insurance for my car at around the 5,000 miles level.
Indeed, there are many factors at stake, and it may provide a substantial discount if you are insuring a newer car and park it in a safe neighbourhood.
Of course, they don't just take you at your word. Anyone could claim to drive just 100 miles a year and really be pushing the 150 miles daily limit.
To ensure you are being charged the correct amount, By Miles will send a small tracking device that you plug in and use in conjunction with a smartphone app, to measure the cost of each journey.
So, you pay up front your fixed annual charge for your car being parked, and your debit card will be charged every month for the miles you drive during that month – whether you estimated five miles and drove 500, or estimated 500 and only drove five.
By Miles usage-based insurance offers one type of cover
By Miles fully comprehensive cover offers, as standard, the following services:
24-hour claims line
Cover against accidents vandalism, fire and theft
The contents of your car are also covered in the event of any of the above
Damage to the car windscreen
Medical costs are covered following an accident
Passengers are also covered against injury while in your car
No claims discount protection
European driving cover - although the company adds the caveat that this cover is 'pretty basic'
For an additional annual premium, you add cover for legal expenses to your policy.
If you've been a road traffic accident that's not your fault and need the expertise of a legal team to help recover costs, damages or compensation, this add-on will pay for support from ARC Legal Assistance.
Three levels of breakdown cover are offered from the RAC:
Roadside and Recovery – if your car cannot be fixed at the roadside, it will be taken to a destination of your choice
Roadside, Recovery, At Home and Onward Travel – as above, but you also get home rescue and hire car provision or hotel accommodation should your car not be fixable at roadside
Roadside, Recovery, At Home, Onward Travel and European – as above, but European breakdown cover is added for up to 90 days
By Miles is best at offering motorists an alternative to the traditional way of insuring that does not adequately discount for lower mileage drivers.
The company offers few optional extras, nor does it offer discounts on insuring multiple vehicles or bespoke products such as temporary insurance. The company prides itself on being an uncomplicated business that sells just the single product with “total transparency”.
At the start of the Covid-19 pandemic lockdown we were told to stop using our vehicles and many people realised they didn’t need their cars as much. Some insurers offered to refund part of their customers' premiums for the time their cars were left idle.
By Miles has built its business around this premise and, in spite of – or perhaps because of – the pandemic, in April 2020, By Miles reported having its strongest week of sales ever.
In summary, then, you’d choose By Miles because:
It offers comprehensive cover rated five stars on Moneyfacts, four stars on Defaqto and rated “excellent” on Trustpilot
Lower prices for lower mileage motorists
Gives you instant record of miles travelled and cost of journey
No claims discount protection as standard
By Miles reported on its website magazine in May 2020 that it had raised £15m in series B funding that will be spent on expanding the team and improving the app. Funding was led by venture capitalist groups CommerzVentures, Octopus Ventures, Insuretech Gateway and JamJar Investments.
In June 2020, By Miles claimed that nearly 19.3 million UK drivers are "potentially" being overcharged for their car insurance because traditional policy providers will not offer discounts for low mileage. The claim was based on analysis of 1.7 million customer quotes on price comparison websites.
In December 2019, By Miles launched a "connected car" insurance policy specifically for Tesla drivers. Tesla electric cars can connect directly with no need of By Miles' telematics device.
James Blackham, By Miles co-founder said: "The insurance industry needs to catch up and launch policies as smart as the cars themselves."
The Financial Ombudsman Service received fewer than 10 car insurance complaints about ByMiles (possibly just one) in the first half of 2020. To put complaints in context, 67 firms had 10 or more complaints each and those totalled 4,550 complaints. Nearly 200 firms had fewer than 10 each, sharing just 479 complaints between them.