Pay-By-The-Mile Auto Insurer’s App Lets Drivers See What They’d Pay

Metromile, which sells automobile coverage with premiums based on the number of miles a covered automobile is driven, launched a free service to let motorist determine how much they’d save with the product, the company announced Wednesday (Oct. 14).

The service, called Metromile Ride Along, lets potential customers download the Metromile smartphone app, answer certain questions and then go about their usual driving business. The app then will let the potential customer find out how much Metromile’s insurance products would cost them.

In some states, the company says, drivers whose safe road behavior is captured by the app can save even more.

“The majority of Americans drive 10,000 miles or fewer every year and could save with pay-per-mile car insurance, but they do not realize it; as a result, drivers overpay for car insurance by hundreds of dollars a year,” Metromile Chief Executive Dan Preston said in a prepared statement. “Ride Along helps drivers learn more about their driving and discover whether pay-per-mile is right for them. We want to empower drivers with control over what they want to pay for car insurance, especially as it is one of the largest expenses for many households.”

The San Francisco-based company says a recent survey established that up to 124 million U.S. drivers are paying up to $947 each in insurance costs that would be eliminated if they were using a service such as Metromile.

Metromile plans start at $29 per month pus “a few cents for each mile driven,” the company states.

The company says it bases its policy costs on “actual observed driving” rather than the demographic information many insurers employ to forecast risk.

Metromile not only detects mileage use, the company says, but by virtue of its rate structure incentivizes using other forms of transportation. Metromile says a study it performed found that drivers cut miles by 10 percent on average after signing up with the insurer.

In the interest of reaching directly to consumers through approaches such as offering Ride Along, Metromile also has sought to link with major players in the auto world. On Sept. 3, the company announced an agreement with Ford Motor Co. Under the arrangement, Ford and Metromile will develop technology for sharing automobile information.

Metromile, which reports having 200 employees, puts the size of the U.S. personal automobile insurance market at $200 billion.