What is Prepayment?

Here at Metromile, we hear a lot of questions about our initial prepayment to sign up for Metromile. We also truly value transparency and don’t wish to confuse any of our customers. The way we work is a little different than traditional auto insurance companies, so that’s why we are here to clear up any confusion about how prepayment works.

What-is-Prepayment

One of the key differentiators between Metromile and traditional insurance carriers is our unique billing model. The short explanation is: the less you drive, the less you pay each month. The Metromile billing structure gives you – the customer – the unique opportunity to always be in control of your monthly bill. This means that you can tailor your bill to fit your budget and your lifestyle. Pretty cool, huh?

What’s Prepayment?

So, herein lies the confusion: if your bill varies each month based on how much you drive, how is it possible to prepay for many months at a time? Let’s throw it all the way back and chat about how billing works here at Metromile before diving into the explanation.

How Billing Works at Metromile

When you first purchase your Metromile policy, you are charged for your first month’s base rate. This is because we don’t have any data on how many miles you drove that month. Then, at the end of the first month, you’re charged for the next month’s base rate + any/all miles you drove the previous month, at your per-mile rate.

Autopay is a requirement for all Metromile customers. If there ever comes a time when you need to update your billing info, it’s not a problem. You can always update your billing information from your online dashboard or app at any time. Simply navigate to ‘Billing’ and then select ‘Edit’ in the ‘Payment Method’ section on the right-hand side of the page to edit your payment information.

A special note for all you New Jersey customers: you exceptional folks may opt-out of autopayments and opt-in for manual billing at any time by calling us at 888-244-1702.

So… You Still Haven’t Told Me What ‘Prepayment’ Is

I know, I know. I needed to make sure you understood how the billing process worked before I did! Now onto the good stuff – promise.

Because we charge for insurance based on mileage, Metromile requires a one-time, upfront payment to start a new policy – and this is called a prepayment. A percentage of your prepayment will be applied as a credit to each of your first five billing statements – which means that your first five bills will be slightly lower. When you receive your sixth bill, the prepayment credit will have been fully spent, so you will no longer see a credit. You can think of your prepayment as a “security deposit” on your insurance policy. In the event of a cancellation in the first six months of having the policy, we will refund any remaining prepayment credit.


Prepayment is only a requirement for your first policy term, the credit is applied to your first five monthly bills. After six months your policy will renew, and no future prepayment will be charged or applied to your policy.

Your monthly bill will be made up of your low monthly base rate + (per-mile rate x miles driven that month) – (prepayment amount ÷ 5) until your sixth bill. From there on out your bill will be calculated by taking your base rate, and adding it to your per-mile rate, multiplied by the number of miles driven that month.

Seems complicated but it’s really not! Hopefully, that helped to clear up any questions or confusion that you had about how prepayment works at Metromile.

Now that you fully understand how prepayment works, it is a perfect time to finally get that quote you’ve been thinking about. As always, we are truly here to serve you, so please email, call, Tweet, or DM us with your burning questions. We’ll get you answers as soon as we can. Be safe out there and see you on the roads!

Julianne Cronin is a Bay Area freelance writer, content creator, and founder/editor of the women’s lifestyle site, The Wink. You can find her working on her capsule wardrobe, collecting cacti, and trying out the latest beauty products on Instagram