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Choosing the Right Car Insurance Deductibles

If you are shopping for new car insurance (or updating your current policy), one of the factors to consider when getting a quote is choosing the deductible amount. It might seem enticing to pick the highest deductible since that often equates to a lower monthly premium. But saving a few bucks in the short term might mean you pay more in the long term. Let’s break down how car insurance deductibles work, with the help of our friends at The Zebra.


Your car insurance deductible is the amount of money you have to pay if something happens to your car before your insurance kicks in, after a covered event (such as a crash, theft or weather damage). For example, if your car needs $2,000 in repairs and your deductible is $500, you will have to pay $500 and your insurer will cover the remaining $1,500. Many insurance providers (including Metromile) will take the deductible out of the indemnity payment (the money you receive from a claim), or the deductible will be paid directly to a repair facility if you choose to fix your car. Car insurance deductibles work differently than other types of insurance deductibles, such as health insurance. Your health insurance deductible applies across the calendar year, but your car insurance deductible will be applied for each claim you file. So if you submit two car insurance claims in a year, you will have to pay your deductible each time.

So how do you choose the right deductible amount for your needs? If you choose a higher amount, there is less chance that the insurer will have to help pay for damage, so your monthly premium might be lower. If you choose a lower deductible, your premium might be higher, but that means you will have to spend less money in the event that something happens to your car. The Zebra advises that you shouldn’t just choose a high deductible in hopes that you will never have to make a claim. There are always things beyond our control (like vandalism and bad weather), so if something happens and you can’t pay for repairs, that’s bad news.

Three Car Insurance Add­-Ons to Keep Your Car Out of Trouble

Next in our “buying a car” series is a guest post from our friends at The Zebra. Enjoy!

After the unmistakable joy a shiny new car brings, comes a glimmer of worry. Namely, just how to keep your new ride in tip­top condition. That’s where insurance add-­ons can help: in addition to the main components of liability and comprehensive insurance, there are optional coverages that can make a major difference in the protection of your vehicle — and yourself. Many insurance companies offer a long list of ancillary policy features, with everything from custom equipment to pet injury coverage, making it hard to tell which add-­ons are worth the extra bucks, and which to ditch. Here, we’ve compiled three add­-ons you should consider, and when they might come in handy.


Personal Injury Protection (PIP)

Personal Injury Protection (PIP) is a vital policy add­-on for anyone that doesn’t have a full coverage health plan or simply has no medical insurance at all. PIP protects you — and your passengers — against personal injury by covering medical expenses, such as medical and surgical treatment, ambulance fees, medication, and in some cases, lost wages and rehabilitation services. And since PIP is a “no ­fault” coverage, even if you are determined to be at ­fault in an accident it wouldn’t limit your use.

PIP coverage benefits vary based on state, insurer, and the specifics of the policy, but typically can provide anywhere from $1500 to $250,000 in personal injury coverage. Considering that in the United States 2.35 million people are injured or disabled in car accidents annually, PIP coverage is often well worth the price.

Uninsured Motorist

There are three main reasons to opt to carry uninsured motorist coverage. One: You want protection against hit and run collisions. Two: You live in a state with a large population of uninsured drivers (you can refer to our table on uninsured drivers by state). And, three: the minimums for insurance required by the state you reside in are too low to cover all accident-related expenses. If any of these match your situation, you’ll definitely want to add uninsured motorist coverage to your policy.

Why I’m Leasing my New Car

This blog post was written by Scotty Abramson, lead analyst on the Earnest growth marketing team and happy Metromile customer.

I work and live in San Francisco. After one awesome car-free year, I heard the call of Lake Tahoe, Big Sur, and Napa. It was time to get a car to better explore the region.


However, I grappled with whether to lease or buy a car. First I had to figure out how many miles I would be driving per year (around 10,000), the type of car that met my current needs (a sporty hatchback), and my car budget (between $200 and $300 per month). I realized a lease was probably the best fit for me. Then I became obsessed with understanding how a car lease actually works.

When you lease a car you are essentially paying the difference between the current purchase price and the price the manufacturer is willing to buy the car back for at the end of the lease. Divide that number by the length of your term, add interest, and you roughly have your payment.

After a week of intense car-lease shopping with multiple dealers, I signed a three-year contract for a VW GTI. So far, it’s been great and I love driving it. I even learned so much in the process I wrote a detailed blog about how I negotiated my lease to get the best deal.

As I this was my first time getting my own new car, I also had to get insurance. Given my expected low mileage per year, and my preference for handling transactions through my smartphone, Metromile made perfect sense for me. So far it’s been great—it was fast to get insured, it’s the right price, I can track my trips through the app.

So if you’re trying to decide between buying and leasing, it pays off to run the numbers and then negotiate every single cent. The same mindset should apply to your insurance. Happy driving!

Maintenance Monday: Buying a Used Car

The seasons are changing and flowers are blooming, which means it’s about that time to start planning summer road trips. You might be eyeing a newer vehicle to take on those trips, and if you decide to go the route of buying used, it’s important to understand how to avoid a lemon. Buying a used vehicle can be like rolling the dice on a craps table. Many people do not sell or trade in their vehicle unless they are having some sort of issue with it. There are plenty of good buys out there, however, and typically if the vehicle runs good and looks decent, it’s a keeper. Following a few simple rules will make your used vehicle purchase a safer one.

Maintenance Monday: buying a used car

The best purchases are typically from a private party who purchased the vehicle new and have properly maintained the vehicle. The general rule of thumb is that the fewer owners, the better. Ask for all of the maintenance records and repair history, because proper maintenance from day one is a great way to keep that vehicle reliable for the remainder of its life. Be cautious of buying a used car from a car dealer – many of those vehicles were purchased at an auction house and may have underlying issues that even the dealer is not aware of. If you do end up negotiating a deal through a dealership, insist that you get a warranty so that if something does come up within a reasonable time period, they are responsible for it. Some problems don’t present themselves right away.

If you are buying from a private party or a car dealer, always insist on a test drive. The drive should be long enough to get a good feel for how the vehicle runs, handles, rides, brakes and accelerates. If something doesn’t feel right, sound right or smell right, walk away from the deal before it is too late. Here are the basic checks you should do:

  • Open the hood and look for obvious problems such as oil or coolant leaks.
  • Check the oil level on the dipstick – if the oil level is low, the engine may be burning or leaking oil. If the oil is very dark and thick, it might have been awhile since the last change.
  • Pull out the transmission dipstick. The fluid should be a pink or red color. If it is dark brown or has a burned smell, the transmission may have problems.
  • Look at the tires. Uneven wear usually means worn suspension parts that could be expensive to replace.
  • Turn everything on and off to see if it works. This includes the lights, turn signals, wipers, heater, defroster, air conditioner, power windows (front and rear), power seats, radio, power door locks, etc. Anything that doesn’t work should help you negotiate a lower price.

Buying a Car: 5 Things to Know Before the Purchase

Now that the long summer days are slowly dissipating, it’s is a great time to focus and get back on track. Fall often signifies the start of new beginnings, even if you aren’t heading back to school. Whether it’s a promotion at work, moving to a new city or buying your first car, we think the increasingly crisp air is excellent motivation to turn over a new leaf (pun intended). Many experts even suggest that September is one of the best time to purchase a car because it’s when next year’s models start rolling into the dealerships. So to help make the purchasing experience as smooth as possible, we are launching a blog series about buying a new car, covering everything from the features to look for to understanding the costs involved. First up? The most important things you should know before heading to the dealership.


What’s the best car for me?
You are the best judge of the type of car that will suit your needs. Do you head up to the mountains to ski every weekend in the winter? Or maybe you only use your car for weekend grocery runs? Make sure the vehicles you consider have the right features, fuel economy and cargo volume to fit your lifestyle. While a car’s appearance is definitely a factor in the decision-making process, the actual specifications are equally if not more important. Once you have an idea of the type of car, check out sites like Edmunds or Car and Driver to identify the best models before you head to the dealership.

Should I buy new or used?
It’s always exciting to have a shiny new car, but sometimes buying used can prove to be a better option. Weigh the pros and the cons before you decide: are there enticing incentives being offered with the new car? Could you really save some cash if you went the used route? Our friends at The Zebra have a great article highlighting the best cars to buy used, so check it out while doing your research.

Is the price right?
Once you have identified the car model(s) that you are interested in, identify the car’s invoice price which is how much the dealer is actually purchasing the car for. Unless you are buying a very popular model, you should be able to negotiate a price closer to the invoice versus the “sticker price” or MSRP. You can also use sites like TrueCar to see what other consumers are paying. If you have this information ready when you walk into the dealership, the dealer will know you mean business.

The New Grad Car Conundrum

Graduation is an exciting and significant milestone, but starting a new chapter in life can mean some big financial decisions ahead. Whether it is you or a family member that is sporting the cap and gown, purchasing a car is a tempting next step for a new grad. However, with newly acquired freedom comes newly acquired responsibilities. What car insurance should be purchased now that the parentals might be stepping back? Should a car be bought new or used? Leased or paid for in full?

New Grad, New Car Insurance

Before you decide if purchasing a car is a good idea, assess your projected monthly income. 50% of millennials say they are living paycheck-to-paycheck and unable to save for the future, which is a slightly scary stat. Even more concerning is the 40% that say they feel overwhelmed by their debt. Most financial advisors would suggest getting your finances in check before adding another expense to the list. If the city you plan to live in has public transportation, try that out before you decide to buy a car. Your new job might even provide commuter benefits! You could also check out local carpooling programs, or car sharing services such as Getaround. And if your commute isn’t far, try investing in a less-expensive vehicle like a bike or scooter.

If you decide that purchasing a car is the right choice, buying used is probably your most economical option. Our friends at The Zebra even compiled a list of the top 10 used cars that give you a “bang for your buck”. Once you’ve found the perfect car, it’s usually better to pay in full since you won’t pay interest, but sometimes you can luck out with a favorable interest rate.

Time to tackle the next big decision: choosing your new car insurance. We are slightly biased in this area, but if you are going to be driving less than 10,000 miles a year (around 200 each week), you could find significant savings with pay-per-mile insurance. If you plan to use your car primarily for road trips, family visits or grocery runs on the weekends, per-mile insurance is for you. Our low-mileage customers are saving an average of $500 per year!