Pay Per Mile Car Insurance

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Some drivers with low annual mileage may benefit from a new kind of insurance plan.

The New York Times explains how a company called MetroMile operates…

The business uses an in-car sensor that logs the miles, and sends a monthly bill, something like a utility meter. The company says that its ideal consumer, someone who drives 5,000 to 8,000 miles a year, can save 25 percent to 30 percent a year, compared with conventional auto insurance.

Other insurance companies already calculate rates in part on whether a vehicle carries a transponder, allowing it to be located or tracked. MetroMile seems to be taking a novel approach, however, in custom-building insurance based on individual behavior.

That is not all that MetroMile is after, however. The sensor, which is connected to cellphone networks, is also tied to a car’s on-board computer and can collect diagnostics data, emissions data, and other information about the condition and performance of an auto. Over time, the company plans to offer subscribers information about ways to drive more safely, get more miles to a gallon of gasoline, or judge better what is being fixed in their cars.

There’s a base fee of $30-60 per month per car, and a mileage charge between 3 and 6 cents per mile. For now, it will only be sold in Oregon.

Stacy Johnson

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