The OBD-II: What’s it Doing for You?

Ever notice your mechanic plugging into that little port under your car’s dashboard? That port is part of the on-board diagnostic (OBD) system, and it is playing a major role in minimizing pollution caused by cars. Devices plugged into the OBD port are also providing important insights and optimizing the driving experience. If you missed our first blog about the history of the OBD port, here’s a quick rundown of why it exists and all of the innovative ways it is being used today.

The OBD system was first introduced in the 60’s as a way to measure a vehicle’s emissions. Decades later, a more robust version known as the OBD-II was introduced, also able to monitor parts of the chassis and body. In 1996, amendments to the Clean Air Act required the OBD-II to be built into all light-duty vehicles (aka all cars available to consumers) as part of the Environmental Protection Agency’s attempts to reduce toxic emissions. If something in your engine malfunctions, your car might run just fine, but you could ultimately face expensive repair costs or unknowingly release toxins into the air like Benzene and Formaldehyde (potential human carcinogens). Because of this regulation, all cars will display a “check engine light” when something is wrong, and mechanics can plug into the OBD-II port to diagnose the problem. So just how bad could things get if we didn’t regulate emissions and monitor engine health? The photo below is not from a horror movie – it’s of LA in the 90’s before OBD ports were standard in all cars and it was hard to detect if an engine was dangerously inefficient.


Fast forward 20 years and the OBD system is proving to be an important factor in reducing the damaging effects of car emissions on our environment. Since the introduction of the Clean Air Act and the OBD requirement, toxic emissions have steadily decreased. Companies are also developing devices to use in tandem with the OBD-II port in all sorts of new and inventive ways. For example, our per-mile insurance customers plug the Metromile Pulse device into the OBD-II port to measure exact mileage. This enables us to provide low-mileage drivers with a more fair insurance pricing model, since their monthly bill is based on the miles they drive, not just on a rough estimate (which other insurance companies sometimes offer a small discount for). (more…)

The Major Benefits of Driving Less (Infographic)

We recently released a report showing that Metromile test drivers who used our smart driving app to measure mileage and later switched to per-mile insurance ended up driving 6% less after the switch. This seemingly small reduction in driving can actually have a significant impact on our economy and environment, especially if everyone reduced their driving by this amount. To illustrate just how much of a positive effect this could have, we created an infographic to show all of the benefits. Check it out:
Drive Less Benefits Infographic

If you would like to dig a little bit deeper, you can check out our original report or the Brookings Institution’s report about pay-per-mile car insurance.

Would You Drive Less If You Paid for Insurance by the Mile?

The following is a post from Jim Levinsohn, Director, Jackson Institute for Global Affairs, Yale University, and George Mohler, Director of Data Science, Metromile

If you’re like most drivers, the answer seems to be “yes.”

We analyzed 191,699 trips made by Metromile customers who started out on a free test drive program and later switched to pay-per-mile insurance. (Each switcher had at least 30 days of driving before and after the switch). On average these individuals drove 16.4 miles per day before purchasing per-mile insurance. After switching, they drove on average 15.5 miles per day—a reduction of 6%.[1]

What’s going on here? It turns out that economics predicts exactly this outcome. When you buy traditional car insurance, you pay a fixed premium. That means that when you’re deciding whether or not to make a given trip, insurance cost doesn’t enter the calculation since that cost is invariant to whether or not you make the trip. You might consider the cost of gasoline and your time, because those costs increase if you make an extra trip, but not insurance costs. One consequence of traditional car insurance is that drivers with below average mileage in effect subsidize the premiums of drivers with higher mileage (an individual’s risk of an accident in a year increases with miles driven).

But when your car insurance is on a per-mile basis, the equation changes. Drivers with below average mileage start to save money, whereas drivers with above average mileage pay more. The less you drive, the lower your premium, so there’s a clear incentive to reduce your miles driven. In order to achieve the same incentive for reducing mileage, the tax on gasoline would need to be on the order of $0.74 per gallon! This is larger than the state gasoline tax in even the highest tax states. Simply changing the way insurance is priced has significant environmental advantages. (more…)

Self-Driving Cars & The Future of Car Insurance

There’s no denying it – introducing self-driving cars to consumers will spark a paradigm shift in the auto industry. But, as is typical for any groundbreaking innovation, there are some pushbacks that are delaying any “imminent takeover”. The government is slow to pass regulations allowing self-driving cars and consumers are wary of the implications. Are self-driving cars really that safe? And how expensive is a “robotic personal chauffeur” going to be? According to new research from Metromile and The Ferenstein Wire, these cars could save consumers $1,000 in car insurance every year. This might be the motivation needed to accelerate adaptation.

Self-Driving Car Insurance

Self-driving cars have a near-perfect driving record thus far, and the few times that they are involved in an accident, it’s typically a human at fault. Once we have welcomed these “futuristic” vehicles into our everyday lives, does the need for car insurance become obsolete? The answer is no, but it will be dramatically reduced. While there will be a near elimination of collision-related accidents (estimated at a 90% reduction), coverage will still be needed for things like break-ins, being hit by an uninsured motorist, and weather-related incidents. Our actuarial team here at Metromile developed an insurance pricing model which predicts consumers will pay an average of $250 per year with an annual savings of $1,000. The model is based on the typical driving record of someone licensed 20 years in San Francisco, driving 12k miles per year, and incorporates evidence from Google’s detailed accident report.

Self-driving cars are still not yet legal for consumers, but you can expect to see some traction as their safety and value continues to be proven. Here at Metromile, we are positioned to adapt our per-mile insurance model as these autonomous cars are introduced to the general public. Because we are able to segment periods of time (like with our Uber partnership where we can identify if a driver is driving for Uber or personal use), we’ll be able to help distinguish between when a car is controlled by a human or a computer. And if per-mile insurance is truly a future-proof concept, why not get started and start saving money today? Learn more at

What’s The Deal with iBeacon Technology?


You also may have heard of innovative uses of iBeacon technology in the news lately, so what exactly is this technology and how is it being used?

Apple first introduced the iBeacon application programming interface (API) in 2013. With this API, hardware devices (aka “beacons”) emit a unique signal that can be picked up by a smartphone when close by, which then triggers apps to perform certain actions. iBeacon uses a low-energy Bluetooth signal, but it is different than traditional Bluetooth technology where a device and phone sync with each other. The beacon continually sends pings, apps on your phone listen for these signals, and when your phone comes into range the apps will respond to the pings. It’s similar to GPS-based “geo push” technology, but with more precision and less battery usage. Most beacon devices are typically small, low-energy, and powered by coin-cell batteries, making them long-lasting and easy to place anywhere.


As Apple explains, “iBeacon opens a new world of possibilities for location awareness, and countless opportunities for interactivity between iOS devices and iBeacon hardware.” Marketing lingo aside, iBeacon technology is a simple and effective way of triggering location-based actions. A popular use is for retailers wanting to send location-specific messaging. Assuming you have the retailer’s app installed, if you pass a beacon in the shop, a special offer could pop up on your phone (if you’ve opted for notifications). Virgin Atlantic used iBeacon location-aware technology to send messages to customers with electronic boarding passes in London’s Heathrow airport. Target uses beacon technology in their Cartwheel app to offer mobile-only deals to customers shopping in the store. Even McDonald’s has been testing iBeacon functionality in their restaurants. In all these scenarios, the beacon remains at a fixed location, and an action happens when an app user happens to pass by.