How Pay-Per-Mile Car Insurance Saved me over $840
I live only two miles from work and oftentimes even work from home, which means I barely drive. Therefore, I didn’t think it was fair for me to pay the same amount of auto insurance every month as everyone else.
I started digging around and researched my options and was able to find a car insurance that charges a base rate plus a per-mile rate based on the number of miles driven each month. This only seems fair because everyone drives varying distances month-to-month and you would only pay for the distance you drive.
I personally switched over to Metromile pay-per-mile car insurance over a year ago and in 2018, I saved over $840. It makes car ownership easy and affordable for low-mileage drivers.
With the increase in ride-sharing use such as Uber and Lyft, you end up paying not only for the ride-sharing service when you use it, but at the same time paying for your car insurance when it’s sitting in the garage. If you spend less time behind the wheel, I believe you should spend less on car insurance.
The most important aspect of having auto insurance is to make sure you will be fully covered regardless of who is at fault. Otherwise, you may have to pay out of pocket to either replace your vehicle or for medical expenses.
Although there may be minimum requirements on liability coverage, the average cost of car insurance may be higher depending on certain factors such as where you reside.
Who is Pay-Per-Mile for?
Pay-Per-Mile insurance is a great idea for you if you drive on average, less than 200 miles/week. This could be a great option for someone who works from home, someone who has a short commute to and from work, has a short travel to and from school and someone who travels often.
Keep in mind, the charges are billed on a monthly basis which means that if you don’t drive over 800 miles total within a monthly billing period (200 miles/week), then the pay-per-mile plan may be a good option for you.
If you’re not sure how much you drive each week or month, then reset your trip meter (trip odometer) to record your total distance traveled within either a week or a monthly period to find out.
How is it priced?
You pay a low fixed rate every month and a per mile rate. Rates are determined based on your age, residential location, type of vehicle, insurance history, credit history and driving record. This rate is then fixed for 6 months.
The number of miles driven each month is determined by the Metromile pulse device which you plug into the OBDII port. This port is available inside most automobiles built from 1996 on. This pulse devise only registers the number of miles you drive and not how fast you drive or how hard you brake.
Here’s an example of how it is billed:
Let’s say you drive on average 10 miles/day X 30 days = 300 miles/month
Per-mile Rate (300 miles driven x 3.2 cents per mile) $9.60
Base Rate $30.00
Monthly Total (Base rate ($30.00) + per-mile rate ($9.60) = $39.60
*Please note, rates vary with driver
Here’s the great news: Your per-day mileage charges are capped at 250 miles per day (150 miles in New Jersey). What this means is if you travel on a long road trip that extends more than 250 miles (150 miles in New Jersey) for any calendar day, you will only be charged up to 250 miles that day.
Since the monthly premium is automatically billed via your debit or credit card, you will not have to worry about missing a payment.
Just like any traditional auto insurer, Metromile offers liability and comprehensive and collision coverages as well. You can also get other coverage options such as: under/uninsured motorist, property damage, medical payments coverage, rental reimbursement and 24/7 roadside assistance.
From my own experience, you will always get a faster response with 24/7 roadside assistance with an AAA membership rather than getting roadside assistance with your auto insurance coverage. Whenever I get into an accident or need roadside assistance, I will always first call AAA roadside assistance.
I recently had to file a claim due to another vehicle hitting my car and I have to say that I received exceptional customer service from the beginning of my claim to the time I received the refund check for my deductible. Yes, there is a customer service number (888) 595-5485 where you can talk to a live person. However, it is certainly convenient to have the option of making a claim through the Metromile online claims portal.
What’s the Catch?
There is no catch for as long as you are a low mileage driver (200 miles/week) who resides in states serviced by Metromile (see below). If you don’t drive your car at all for a given billing month, then you only pay only the monthly fixed rate. If you do drive, then the per mile rate will be added to the fixed rate.
States Where Pay-Per-Mile Insurance is currently Offered
- New Jersey
I heard more states will be added in the future. However, if you or anyone you know who resides in any of these states and would benefit from the Pay-Per-Mile plan, then head on over to Metromile and get a free quote.
If you’re someone who drives less than 200 miles a week or cumulatively less than 800 miles per month, then switching over to a pay-per-mile plan could probably save you a good deal of money.
With the gaining popularity of ridesharing especially among the millennial generation, paying a set monthly fee for auto insurance may no longer make financial sense.