If you live in a city, the odds are good that you don’t drive nearly as often as people who live in rural areas. So why should you pay for your car insurance while your car is sitting in a parking lot?
That’s where Metromile comes in. It’s a new model for the auto insurance industry: a policy that lets you pay for the miles you drive, not simply for the privilege of owning a car.
“Traditional car insurance is unfair to low-mileage drivers,” Metromile’s website reads. “The number one risk indicator for drivers is how often they’re on the road. So if you’re already driving less, you should really start paying less.”
Named one of FastCompany’s Five Fintech Startups to Watch in 2017, San-Francisco-based Metromile raised nearly $200 million in a series of unannounced investment rounds. It’s quietly positioning itself to grow nationwide as an insurer.
Metromile’s typical fees—$35 per month plus five cents per mile—can lead to big savings for low-mileage drivers. For those who do more driving, Metromile is experimenting with partnerships with companies like Uber to provide plans that provide both personal and commercial coverage.
“It’s all about data and creating a customized risk profile for yourself,” Nabil Meralli, a partner at InsurTech Venture Partners, told FastCompany.
How does Metromile work? It starts with the Metromile Pulse, a small free wireless device that plugs into your car’s OBD-II port. The Pulse securely counts your miles to determine your total monthly bill.
In case you’re worried about being too closely surveilled by your insurance company—one of the things that keeps a lot of people from using tracking devices from other insurance companies—Metromile doesn’t consider other driving factors like how fast you drive or how hard you brake. It’s all about just the number of miles you drive.
The Metromile Pulse also allows you to work with the smart driving app, which allows you to keep track of your trips, monitor your car’s health, and never lose your car in the parking lot.
Metromile is currently available in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington, but the company is expanding into other states.