When my husband and I moved from Austin, Texas, to San Francisco, California, our driving habits shifted dramatically. We went from driving every day to rarely pulling the car out of the garage. The kicker is that we were paying for full coverage on a car that mostly sat idle. We needed to find another auto insurance plan. I spotted a billboard advertising Metromile, a pay-per-mile insurance provider, and started researching usage-based insurance.
The first usage-based insurance programs started roughly a decade ago when mainstream providers began offering discounts based on an individual’s driving habits. Since then, new companies, such as Metromile and Root, adopted the model as the core of their business. (Check out our review of Root and this handy comparison chart.) These newcomers offer plans tailored to individual driver behavior, rather than relying on aggregate driver data. For drivers with low mileage and safe driving habits, usage-based insurance can be a more cost-efficient option than traditional plans.
What Makes Metromile Different?
You Pay a Base Rate + Pennies Per Mile
Metromile applies a usage-based insurance formula based on how many miles you drove the previous month. The company starts with a base rate determined by traditional data such as what kind of car you drive, your age and driving history, and credit score. But Metromile then adds their special sauce: your actual mileage multiplied by a cost-per-mile fee. The result is simple: if you drive less, you pay less.