Today I want to draw your attention to the money you may be overpaying when it comes to your car insurance. As always, I base this on my own personal experience and how much money I’ve managed to save over the years:
- The first tip you must remember about car insurance is that you can generally cancel your existing policy at any time. The insurance provider will refund the prorated balance remaining on any premium that you have already paid, so when you find a better rate there is really no reason why you can’t take advantage of that savings immediately and switch over to a more affordable provider.
- When you turn off your lights, you don’t continue paying for electricity – you only pay for what you actually use. So… using that logic, what if you could pay a car insurance provider based on the actual miles you drove each month instead of a flat fee?
- Many of you probably also know that insurance providers will often reduce your premium if you drive less than, say, 8,000 miles per year. I had already been taking advantage of that perk for many years, but then in August 2014 things got even more interesting because I discovered a company called Metromile.
At its core Metromile is car insurance designed for drivers based in CA, WA, OR, IL, VA, PA, and NJ who put less than 10,000 miles on their car each year. Because of their unique pay-per-mile model, their coverage options save the average customer $500 annually.
When I used their rate calculator to get a savings quote online, it was projected that I could potentially shave a little over $400 off my annual rate while still maintaining equal coverage, deductibles, etc. In fact, I would even get a little bump in coverage above and beyond what I already had in place and I’d be paying an average of just $85/month with Metromile.
Below is an actual screenshot of my 2016 coverage dashboard which shows how each month I only pay a few cents per mile with a low base rate in exchange for full coverage:
When you first partner with Metromile for their pay-per-mile insurance you’ll receive a Metromile Pulse device. You just plug it into a special “OBD-II” port in your car and it tracks your driving activity. This is the same port that your mechanic uses to diagnose problems in your car when you bring it in for servicing. In the case of Metromile, the Pulse device is used to track mileage and provide car data, such as driving stats, engine health and car location. It’s even been used to recover stolen cars!
I found that my average monthly premium would cost significantly less if I made the switch to Metromile’s coverage. So I signed up online, and then called my previous insurance provider and canceled my existing contract. My previous provider sent me a check for the money I had already paid towards my former premium, and I was on my way to saving a little over $400 annually.
As it would happen, a drunk driver would total my car in November 2014, just a couple of months after I had switched over to Metromile. As inconvenient and scary as that car accident was, dealing with Metromile and getting my total loss claim processed and paid out was basically painless. And so when I got my replacement vehicle it was a no-brainer for me to add Metromile insurance back onto it.
I’ve been a happy, paying Metromile customer ever since and have saved hundreds of dollars while maintaining great coverage for the last year and a half.
Below is another example of how I’m able to track my driving activity and costs using Metromile; this is an actual snapshot from my own account dashboard. Pretty cool, huh?