A few months ago we switched our family car insurance from a bundled package to a West Coast upstart called MetroMile. The savings has been significant and I'm going to explain how it works but want to note up front: it might not be the right car insurer for you.
Car Insurance: The Basics
Vehicles are expensive, often behind housing the second most expensive thing consumers purchase, and the cost from an accident caused by a vehicle can be steeper still. To offset those risks, most states require drivers to carry vehicle insurance in the event something bad happens so accident victims are cared for and you can replace your vehicle. It works like any insurance program: you pay a steady amount of every month for coverage, then if the unlikely bad thing happens the insurer pays a lot more money than you paid in to fix things. The insurer makes money because most of their customers don't need a pay out, and because they're able to invest the money you pay in premiums to gain interest.
Before our most recent car insurance term expired, we had managed to drive some savings by bundling it with other insurance needs, like for our home. During the Covid pandemic, however, our driving had absolutely plummeted and all the adults in our household had adapted to working from home. When I began researching new options for car insurance I stumbled across a new version I thought could potentially save us significant income: paying per mile.
Pay-Per-Mile Insurance
Traditional car insurance charges you a flat fee each month, guaranteeing you specific coverage levels agreed upon in your contract. Pay-per-mile insurance charges, as you might expect, based on how many miles you drive in a month. This approach offers a lot of value to both the insurer and their customers: the vehicle owner only pays for the time they're actually using their car, while the insurer targets drivers who spend less time on the road. The less one drives, the less likelihood you have to experience an adverse incident on the roads lowering the likelihood of a major payout from the insurer. That means they can cut the rate they charge for coverage passing the savings on to you and me.
Enter: Metro Mile
The insurer I found offering the best deal in this space was Metro Mile, and I'd be remiss to not give props to my brother-in-law Dan who had mentioned hearing about them and stuck the name in my brain. Their offer is simple: they charge a small monthly fee plus a per mile charge to insure your vehicle, with payouts/coverage similar to what I had in my packaged plan previously. To document the mileage, you plug a small device into a special outlet in your car (the diagnostic outlet, not the one you use to charge your phone while you're in your car) which tracks how many miles you drive. At the end of each month they tally up the miles, add it to the flat monthly fee, and that's your bill.
"That sounds great, Bill, but didn't your original insurer already charge a monthly fee without the mileage charge?"
So glad you asked, inquisitive hypothetical reader. Let's just break the numbers down, shall we?
My wife and I drive a 2002 Mazda Protege and 2007 Toyota Corolla. Previously to insure both vehicles we paid $120/month in car insurance, discounted because it was bundled with our home insurance. Metro Mile had a monthly charge of $20.40 for the Corolla and $17.40 for the Mazda, meaning if we drove 0 miles we'd pay just $37.80 each month to insure the same vehicles. That's a significant savings, but while we've cut our driving thanks to reduced commuting we didn't cut it quite that much!
The fee per mile was a smidge under $.05, so I calculated how many miles we'd need to drive before we'd pay more than $120/month in insurance and landed on an astoundingly high number: over 700 miles! A quick look at how many miles we'd put on the car each month showed that number was WAY out of reach minus the occasional summer road trip for camping, though even then we're offsetting it slightly by replacing our usual home driving with the trip. We opted to pull the trigger on the change in November. A half year later, how have things stacked up?
Adding It All Up
Had we stuck with our traditional insurance, the cost of insuring our two vehicles would have been $720, or $120/month X six months. With Metro Mile we paid $367.82, a savings of about half. Our highest bill during that timeframe was $71.55, and we averaged slightly less than 500 miles of driving each month. Suffice it to say I'm very pleased with the switch as a 50% reduction moving forward with a lot of wiggle room in additional driving makes a ton of sense for us.
The Downsides
Metro Mile turned out to be a no brainer for the Stark clan, and I wish I had switched us sooner. But it's not all sunshine and roses, and it may not be the right choice for you. Here are dome downsides:
- The measure of a car insurer isn't the monthly costs of doing business with them, but how they treat you when you need the services you're paying for after an accident. We haven't had that experience, and while I'm hopeful we never do, it means I can't speak to their customer service in that situation. All the savings in the world amount to nothing if your insurer tries to deny your claims when you need them. If you've had a great experience with an insurer who took are of you during an accident, it may be worth it to you to pay a premium in price to have the peace of mind knowing they'll take care of you in a worst case scenario.
- Metro Mile is only available in a few states so far, mostly on the west coast. That means all my loved ones in my native Midwest can't take advantage yet. However, if you live in Washington (state), California, Pennsylvania, Oregon, Illinois, Arizona, Virginia, or New Jersey you are eligible to take advantage.
- The program only benefits you if you don't do a ton of driving. The amount you can drive to realize savings is actually far more significant than I had originally calculated, but if you use your vehicle for something like making a living at deliveries, the math almost certainly won't work out for you and you're better off with traditional car insurance.
