If you’re like me and don’t use your vehicle all that much, it might be time to think about a new way of paying for car insurance.
I had seen the TV commercials and online ads for pay-per-mile insurance (specifically Metromile) but never paid much attention. That’s until I received my annual car insurance bill and realized it had increased by more than 20% over the previous year to $1,900.
I live in a big city and one where car break-ins are nearly the highest in the nation. That means insurance providers were raising premiums. But still, I couldn’t believe I was about to be charged so much for my car insurance. I park in a secure garage. I drive only about 5,000 to 6,000 miles a year because I work from home and I’ve only had a one minor fender bender in my 30+ years of driving. Paying nearly $2,000 a year for a car that I drove only around town for small trips to the grocery store and the dog park along with the occasional out of town get away seemed crazy.
So, I looked into Metromile. I was skeptical that I could really save as much as they advertised. Their claims said “Cut your auto insurance bills in half.” And while reducing my annual premium was my goal, I didn’t want to reduce my coverage or service. What if I had to file a claim? Or needed customer service?
I read the reviews from a variety of places on the internet (never rely solely on the company website). And then I asked around in my circle of friends and beyond to get some feedback. Anyone I knew that used Metromile had a positive experience with the service.
So, I took the plunge.
The online sign up was simple. I went to their website and answered a few questions, provided my information, and then was required to snap a few photos of my car that were easily uploaded to their site. Based on my driving history, my location, my estimated annual mileage and some other factors, I was given a base rate (which was about $41 a month) and an amount that I would be paying per mile. It can vary, but mine was about 5.3 cents per mile.
To get going I paid just $50 for the first month. I was enrolled immediately and could download proof of insurance, which is required by nearly every state to operate a vehicle.
Then Metromile sent me a device that plugs into a port in my car (every car has one) and tracks my mileage. The device arrived in the mail about 7 business after I signed up. I had some issues and the device was not working (I was notified via email that Metromile was not recognizing the device). I called customer service and was told they would send out a new device along with a pre-paid envelope for me to return the defective device. It was simple and easy and they gave me a grace period based on my situation. I was impressed.
One thing I really like is that there are no surprises. Metromile asks that you download an app, which lets you see your mileage, pay your bill, file a claim and more. You pretty much know exactly what you’ll be paying each month and can see your mileage. The second month, I didn’t drive much and my bill was $41.90 The third month, I took a weekend 300-mile round trip to see a friend and even with that excursion and lots of small ventures around town my bill was only $58.04.
And, if you’re like me and take the occasional longer road trip, it won’t cost you. Metromile doesn’t charge you if you go 250 miles in a 24 hours period. So, I know that I can head down to Los Angeles or to up to Lake Tahoe and not pay extra.
I’ve only had the service for 3 months, but based on what I’ve paid so far, I estimate that my annual bill will be below $1,000, which is a more than $900 savings for me. And that’s a very conservative estimate, as I anticipate that during the summer and fall months, I’ll use my car to get out a lot and enjoy the nice weather.
The bottom line is that is you don’t drive much and think you’re overpaying for car insurance, pay-per-mile auto insurance might be right for you.