Stretching Your Dollar

Brad Hawkins reports

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DALLAS — In today's treacherous financial environment, what's worse than paying for something you're not using?

A Dallas company just started insuring drivers in a new and different way — by the mile — and that can offer some real savings for motorists like Ed Pichon, who doesn't drive much.

"I normally work from home. Sometimes I work downtown so I take the train," he said. "I put on maybe five or six-thousand miles a year, and that's mostly driving to church."

Because Pichon drives less, he can now pay less for his car insurance, paying only what he uses — by the mile. It helps his family budget because his wife was recently laid off.

"I think I've worked out the math," he said. "It's about 45, 46 percent [savings] when I switched."

Chris Gay capitalized on that lower risk, founding MileMeter.com to give Texas drivers the first pay-as-you-go auto coverage.

"It's very hard to get in an accident if your vehicle is in Park," Gay explained.

It takes about five minutes to log on, answer some questions, and get a quote from Milemeter.com. Coverage is sold in blocks of 1,000 to 6,000 miles.

"We don't use GPS devices or vehicle-installed tracking hardware," Gay said. "At MileMeter, you just tell us what your odometer reading is, and as long as you're honest with that, you'll experience dramatic cost savings and a great insurance product."

Pichon says the new way leaves him a little bitter about all those past premium payments. "They knew what kind of risk I was, and they knew how much they should be charging me, because I was only driving a couple of thousand miles a year," he said. "And they charged me twice as much anyway!"

Now, he's cut his car insurance payment almost in half. Any family has the potential to find some significant savings by changing the way they purchase coverage.

It's estimated that the average American family spends two percent of its budget on vehicle insurance.

E-mail bhawkins@wfaa.com