Dispelling the Myths of Pay-As-You-Go Auto Insurance

Believe it or not: There is auto insurance based on how you drive. If you don’t drive often or long distances, you could save money with this coverage.

The COVID-19 pandemic has turned a lot of us into low-mileage drivers.

Between stay-at-home and shelter-in-place orders, you might be stuck at home quarantining or with nowhere to go. Meanwhile, if you’re now working from home, you’ve probably cut back on a lot of the miles you used to drive.

So if you’re driving less often these days, for whatever reason, you might be wondering what pay-as-you-go auto insurance is all about and if it could save you money.

We believe paying for car insurance based on the miles you drive is a fairer concept. About two-thirds of drivers in the U.S. are overpaying for their auto insurance. According to a 2018 survey of customers who saved, new Metromile customers save 47% a year on average compared to what they were paying their previous auto insurance company.

Let’s take a look at some of the most common myths about pay-as-you-go car insurance.

Myth: My rates will go up if I speed or slam on the brakes.

No judging here: if you hit the gas pedal or slam on the brakes once or twice, your auto insurance rates will not be immediately affected. 

The most important factor determining the price you pay with Metromile is how many miles you drive each month.

Myth: My driving data is sold to third-party companies, so they can have information about where I am driving.

Metromile takes steps to keep your driving data and personal information secure and private.

Metromile does not sell, share, or rent any data to unaffiliated third-parties. Rest assured the information the Metromile Pulse device accesses is used to accurately count the miles you drive each month and provide you with a fair rate. (The device helps to get your claims resolved faster, too.)

As a Metromile customer, you also have the option to disable location services, and it won’t affect your bill. But keep in mind, you won’t be able to access free smart driving features, which can help you find your parked vehicle, find out about street-sweeping tickets, and look back at your past trip details.

Myth: My pay-as-you-go insurance rates will increase if I’m driving more than usual.

There is no need to worry if you are driving more than you originally estimated. 

There is no penalty for driving more than you usually do or going over the estimate you supplied when you first signed up.

Your per-mile rate is fixed for your policy term and won’t be affected by increased driving. Plus, if you drive more than 250 miles (150 in New Jersey) in a single calendar day, your extra miles will be free as a bonus. So feel free to take that road trip.

Myth: The rates are so low, there must be coverage exclusions.

With pay-as-you-go insurance, you can have the same great insurance coverage that you are used to. Some drivers may even have higher limits at the same or lower price they paid another insurance company. 

Metromile policies are personalizable: You can choose to add comprehensive and collision coverage, roadside assistance, select different deductible amounts, and more. 

Drivers can save money with pay-as-you-go auto insurance because the premiums are dynamic. There is no need to call to let us know that you have been driving less like you might have done with your past insurer.

Myth: If I get into an accident, the claims process is going to be tedious.

In the unfortunate event of an accident, our claims team is available to help 24/7. 

You can even start filing your claim right from the Metromile app or the website. Our artificial intelligence claims assistant AVA works with the Pulse device to verify details and quickly process them. In some cases, we even pay out claims the same day.

Need a jump, tow, or locksmith? We’ve got you covered 24/7 if you add roadside assistance to your policy. 

We also have a team of licensed claims adjusters who will keep you updated on your claim’s status and can answer any questions you may have along the way.

Myth: Since this insurance model is based on mileage, I won’t be covered when I am parked.

While our pricing model is different than other insurance companies, the coverage still applies the same way as traditional insurance companies. 

Accidents can happen at any time, even when your car isn’t moving. When you choose to add comprehensive and collision coverage, you can be covered even while you are parked.

The bottom line

Pay-as-you-go auto insurance, sometimes called pay-per-mile car insurance, is insurance based on how far you drive. Your actual driving determines how much you pay instead of a flat rate like with other insurance companies.

Some drivers save by switching to pay-as-you-go auto insurance. You can see if you could save with Metromile by trying Ride Along™ for free.

Ride Along is a feature in the Metromile app that helps you get a more accurate rate. Download the app and get a free auto insurance quote to start your trial. (Remember: You’ll still need to keep your current insurance coverage unless you decide to switch to Metromile right away.) Then, drive as you typically would for about two weeks. We’ll consider how you drove, including how many miles you drove, to show you your rate. 

We think this will help you understand if you can save money before you switch to Metromile and begin your pay-as-you-go auto insurance coverage.