Could pay-per-mile insurance save you big bucks?

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Looking for a new way to save money on your auto insurance?

If you live in a metro area and don’t have too extreme of a daily commute, you should check out the world of pay-per-mile insurance.

RELATED: How to get a cheap rental car — Clark Howard style!

Don’t put a lot of miles on your car? Check out this insurance!

You’re already used to the traditional insurance model, but there’s a new option out there that’s worth a look. It’s called pay-per-mile insurance and the leader in the field right now is a company called Metromile.

The basic idea with pay-per-mile insurance is that you pay a base rate each month and then also a per-mile rate on top of that.

In the example given below, the per-mile rate is set at 3.2 cents/mile.

metromile rate chart

Metromile says it sets your base rate by factoring in your age, credit history (state specific), type of vehicle, driver history and length of prior insurance (also state specific).

“It’s great for people who drive under 200 miles a week, which happens to be 65% of U.S. drivers,” Metromile CEO Dan Preston says in a video.

And here’s the nice thing: You won’t be charged for the miles you drive above 250 a day (150 in New Jersey). So you can still take all the road trips you want!


Metromile is currently only available in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. You can join the wait-list to be notified when it becomes available in your state.

The Metromile Pulse is the key to pay-per-mile insurance

Your mileage is monitored with a telematics device called the Metromile Pulse that plugs into you OBDII port — a common feature on most cars that are 1996 and newer.

obd II port metromile

Now, you may be sitting there saying, “Wait, isn’t this the same thing that Progressive’s Snapshot does? Or that Allstate’s Drivewise or State Farm’s Drive Safe and Save program does?”

Ah, but there’s one big difference!

Unlike those services, Metromile says its pay-per-mile business model doesn’t focus on how fast you drive or how hard you brake. They just keep a tight focus on your odometer reading.

You can also keep track of your trips using the free Metromile app on your smartphone. The app includes features like a car locator and street sweeping alerts for in-town drivers.

We should note that the GPS in the Metromile Pulse will share location-based data. That data is not necessary for calculating your rate, so be sure to turn off the location-based data sharing if you’re concerned about privacy issues.

A few other services out there that are similar to Metromile include Milewise through Allstate and Esurance Pay Per Mile, which is also owned by Allstate. The Esurance option is only available in Oregon at this time.

Add-on coverages

Metromile offers both liability protection and comprehension and collision coverage, like traditional insurers.


And like the mainstream players, the company also offers add-on coverages you can elect to include in your policy for a fee.

Chief among these is roadside assistance — which includes fixing a flat tire, lockout and/or towing.

Before you jump at this extra, consider money expert Clark Howard’s warning about why you never want to use roadside assistance from your insurance company.

His preferred alternative is for you to get roadside assistance from AAA or an emergency roadside assistance app like this one.

Another add-on that’s available to Metromile customers with comp and collision on their policy is rental reimbursement. With this add-on, you can get up to $30 a day for up to 30 days if your vehicle is out of commission at a repair shop following an accident.

Meanwhile, one freebie that Metromile throws in if you have comp and collision is pet injury protection. Should your dog or cat be injured in a covered claim while riding in your vehicle with you, this coverage will pay you up to $1,000. (Void in Illinois and Virginia.)

Making a claim with Metromile

If you have to make a claim with Metromile, you can do the entire process right on your smartphone at or by calling 888-595-5485.

You have the option to use data from the Pulse device, and doing so can speed up the claims process. Metromile boasts that some claims can be resolved in hours.

To begin your claim, you will need the following info:

  • Policy number
  • Date of accident
  • Location of accident
  • Description of accident
  • Names of all parties and vehicles involved

metromile claims


If you have to make a claim while you’re in a rental vehicle on vacation, Metromile says that it will most likely be covered. And bonus: There’s no need to plug the Pulse in and you won’t be charged for miles in a rental vehicle.

So if you have comp and collision through Metromile, that means you can skip the expensive collision damage waiver (CDW) coverage that’s pushed at rental counters and can really run up the daily cost of your rental!

Canceling your Metromile policy

How to cancel your policy is among the top questions at Metromile’s Help Center, following basic questions about the Pulse device.

That’s probably because pay-per-mile insurance isn’t for everybody.

The good news is that if you want to try Metromile and later decide you don’t like it, canceling is easy for most customers.

If you’re a resident of California, Illinois, New Jersey, Oregon, Pennsylvania or Washington, simply call 888-244-1702 during normal business hours from 6 am to 6 pm PT.

However, residents of Virginia won’t find the cancellation process to be quite as straightforward. If you live in the Old Dominion state, Metromile says you’ll have to fill out the online contact form and wait to hear back to cancel.

Once you’ve canceled, be sure to mail the Metromile Pulse plug-in device back to the company within 30 business days. You can use the pre-paid envelope the company sends you. Otherwise, if you go past 30 days without returning, you will be charged a $100 fee.

Clark’s take

Money expert Clark Howard’s take on the pay-per-mile insurance model is simple — he loves it!

“Motorists who log mega-miles may cry foul about the idea of [pay-per-mile], but here’s how I see it: You already pay more for gas and maintenance, based on how much more you use your car versus a more casual-use motorist. So extending that idea to insurance seems to make perfect sense,” Clark notes.


RELATED: Here are the most & least expensive states for car insurance in 2018

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