VOOM introduces “pay-as-you-ride” insurance in US

It’s the perennial complaint of the motorcyclist with a bike that they rarely ride: They’re stuck paying insurance that they don’t actually use. Now, there’s a new service in the US that addresses that problem … kind of.

VOOM is offering a new insurance plan for American riders that charges a monthly base fee, and then a secondary usage-based fee. You can see the basics of the plan in the YouTube video above. It’s stupid-simple; riders simply submit a photo of their odometer each month, and are billed based on how much they actually rode.

Would you actually save any money under this arrangement? It’s hard to say. VOOM’s marketeers certainly want you to think so, but no doubt the details will differ depending on your driving record, where you live, and so on. And again, as this is based in the US, it’s not something we can take advantage of in Canada … at least, not for now.

The reality is that the entire transportation industry is headed towards usage-based fees, as we pivot away from internal combustion engines. Recent US legislation proposes a mileage-based taxation on vehicles, and if you think about it, it’s easy to understand why. Currently, transportation infrastructure is funded by gasoline taxes, and that revenue will disappear as drivers switch to electric vehicles.

With that in mind, legislators are switching to usage-based taxation, and it’s logical to expect the insurance industry (a cynically-minded motorist might consider this a private-sector tax) will also switch to some form of usage-based taxation. So, again: VOOM’s service is not available in Canada now, but it seems likely we’ll see something like this in the future in our market, if VOOM is a success in the US.

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