Drive fewer than 200 miles a day? Your insurance company is ripping you off

As we explain in another post, insurance is never a good investment and at best it’s a cost of living to be minimized whenever possible. Conventional car insurance, an inefficient market for consumers, charges the same premium regardless of one of the largest risk influencers: how much you drive.

For a couple in their late 30s with a clean driving record and two cars, Progressive recently quoted $120 per month. 

Compare this to innovators such as Metromile that charge by the mile. Taking that same couple with their same cars, Metromile quotes a base monthly rate of $18 and a per-mile rate of 1.5 cents. That means they're saving money as long as they together drive fewer than 227 miles a day!

Metromile writes policies in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington, with more to come. 

Worried about lots of long road trips? No need. Metromile caps the number of miles it charges you per day at 250 in most states. So if you drive 500 miles in one day you’re only paying for miles up to the cap.

Metromile works by having you plug their device into your car’s diagnostic port. It brings fringe benefits. With the app, you can find where you parked your car, be alerted to engine codes, and get trip summaries. The company also doesn’t care how you drive, just how much. It doesn’t factor anything like hard breaking or speeding into what it charges.

The Smart Savvy Life