Mileage matters: New tools to get it right

By Michael Gannon June 15, 2015

Higher-mileage drivers can have loss costs up to twice the costs of lower-mileage drivers. But getting annual mileage “right” can be a challenge. Many consumer and agent estimates are notoriously error-prone. In the past, insurers have relied on the customer’s self-disclosed mileage estimate, which was once the only technique available.

The result of employing this historical technique is often a distribution similar to the red bars below, which show large spikes based on typical mileage discount thresholds. The green bars are more representative of actual miles driven. For more information, read John Cantwell’s article about the challenge of getting annual mileage “right.” It includes a table summarizing some of the most common techniques found in the industry, along with some of their pros and cons.

mileage matters 2

Graph data is for illustration purposes only. Figures do not represent any specific insurer information, but are typical. The “after” distributions reflect results using Verisk’s proprietary mileage analytics and customer outreach program.


Michael Gannon

Michael Gannon, director of Marketing for Verisk Insurance Solutions, is responsible for strategic marketing in support of Verisk underwriting auto and property solutions. Before joining Verisk, he held similar positions at Verisk’s Xactware and AIR Worldwide.