On Wednesday, July 16, Metromile launched its cost-efficient “per-mile” auto insurance system to drivers throughout California.
According to a July 16 TechCrunch article, Metromile’s system, which allows the 70% of drivers who drive for less than 100,000 miles per year to pay for their insurance based on their mileage, has already seen success in Oregon, Washington and Illinois.
While traditional auto insurance frequently overcharges the average driver to subsidize high-mileage motorists, TechCrunch reports that Metromile’s insurance allows the driver to pay an insurance rate that reflects their individual driving patterns.
The result, according to Metromile, is an annual savings of as much as 50 to 60% for the average driver, or about $500, reports a Fast Company article.
“A program like this will be advantageous for some, and not for others. In the state of Florida this could be beneficial due to the amount of retirees, considering how little they drive. The drivers that know how many miles they drive are going to be the ones that sign up for this program, and the insurance company will not be able to capture the premiums for cars that sit in the driveway for 6 months out of the year.” said Doug Jonhson of Johnson and Fletcher Insurance
According to TechCrunch, Metromile gives its customers a free cellular GPS telematics device that plugs into a car’s diagnostic port to track how many miles are driven. The device then reports back to Metromile, which charges for insurance based on a customers’ mileage.
And while Metromile’s service is currently only available in four states, the company plans to expand to the rest of the country in the future.