Usage-based insurance can also be referred to as pay-per-mile, pay-as-you-go or pay-as-you-drive insurance, and all of these terms refer to telematics. Telematics measure metrics of driving habits such as driving speed, miles driven and hard-braking incidents. The insurance company uses an installed device to record the results and rewards safe drivers or those with low mileage with discounted auto insurance rates. Usage-based insurance is gaining popularity and many auto insurers are beginning to offer it as an option to customers to save on insurance premiums. Here are some of the best auto insurers that offer a usage-based option.
MetroMile was founded in 2001 and provides auto insurance targeted to drivers with low yearly mileage. Coverage is currently available in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington with plans to soon expand into other states. There is a waitlist if you want to be notified when coverage is available in your state.
Policyholders are provided a free wireless device that plugs into the vehicle’s diagnostic port. Unlike other auto insurers offering telematics options, MetroMile only tracks mileage and does not track other driving factors such as braking incidents, speed or sudden turns. A fixed monthly rate is charged plus a charge per mile.
Miles over 250/day are free (150/day in New Jersey); so you don’t have the stress about mileage rates if you are going on a long trip. The mobile app offers features for trip optimization, lost car, car health and free alerts for street sweeping in certain cities to help you avoid tickets. The biggest saving on auto insurance goes to drivers with less than 10K annual mileage. Coverage options include:
- Bodily injury
- Property damage
- Uninsured and underinsured motorist coverage
- Personal injury protection/ medical payments coverage
- Rental reimbursement
- Emergency roadside assistance
- $250, $500, and $1,000 deductible options
The Progressive Insurance usage-based option is call Snapshot. After signing up, you will receive a small device through the mail to plug into your vehicle’s port (usually located under the steering wheel). Snapshot is not available in Alaska, California, Hawaii and North Carolina and the device will only work for cars manufactured after 1995. Driving factors recorded by the device include the miles driven, time of day, hard-braking incidents or hard-cornering incidents. Speed is not recorded.
Once the company evaluates the data of a 30-day driving period, if you qualify for a discount it will be applied to your policy. You will receive a pre-paid box to return the device through the mail to Progressive. The safest drivers can expect to receive up to a 30 percent discount on auto insurance (drivers with fewer miles driven, few hard-braking or hard-cornering incidents and those drivers who do not drive as much between the hours of midnight and 4 a.m.)
Allstate’s Drivewise program offers discounts of up to 30 percent to auto insurance customers who live in Colorado, Michigan, New Jersey, New York, Arizona, Illinois and Ohio. This program also uses a telematics device installed in the vehicle’s diagnostic port. The device tracks speed, mileage, hard-braking and other driving habits. For drivers who initially qualify to receive the 30 percent discounts, additional savings can be earned and deducted from your policy premium every six months. To receive the maximum safe driving discount; drivers should avoid driving 80 mph or above, driving more than 12,000 yearly or more than 30 miles per day; driving between 10 p.m. and 4 a.m. and any hard-braking incidents. Even if you do not realize any savings on your auto premium, your premium will never go up based on data collected from the installed telematics device over a 12-month driving history. Drivers must drive their vehicle at least 90 days over a six-month period to qualify for the safe-driving discount.
SmartRide is Nationwide’s usage-based program and offers discounts to its policyholders of up to 40 percent with an instant discount of five percent for enrolling. After you install the device in your vehicle, the discount is updated weekly. After the four- to six-month evaluation period, you mail the device back and the final discount is locked in and applied to your auto policy upon renewal. The program is only for vehicles made after 1996 and is not compatible with some hybrid and diesel-powered vehicles.
Factors determining the discount include mileage, hard-braking, time of day and acceleration. The best discounts are given to drivers who avoid driving between midnight and 5 a.m. and who qualify based on safe driving habits. Data gathered from the device will only be used to qualify for a discount and will not increase your auto insurance premium
DriveSense is the Esurance usage-based program and can save enrolled drivers up to 30 percent on auto insurance. The device is installed in the diagnostics port and measures braking incidents, mileage, driving hours, speed and acceleration. The device does not work for vehicle models manufactured before 1996, electric vehicles or hybrids. The mobile application allows you to view your driving information based on the factors determining your discount. This will allow you to make any adjustments to maximize your discount.
Esurance is transitioning its usage-based program, DriveSense, from a plug-in device to a mobile app that is currently available in Arizona, Colorado, Connecticut, Georgia, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, Ohio, Pennsylvania, South Dakota, Texas, Utah, Virginia, Washington and soon coming to other states.
Safeco’s Rewind program is actually an accident forgiveness program that reduces or eliminates premium surcharges for accidents or tickets. The advantage comes in not having to wait for three to five years for an accident or ticket to fall off your driving record. Instead, you can sign up for a four-month driving evaluation period through an installed telematics device and have the charges reversed. If you’ve had accidents or tickets, this savings could add up to significant savings on your auto insurance premium.
During the evaluation period, you are given a safety score based on mileage, speed, location, time of day, VIN number and acceleration. There is no charge to enroll and the program is not offered in all states. You can review your driving data online and track your progress. Only one driver per policy is allowed to participate and you can only use the Rewind Program one time.
IntelliDrive is Travelers’ usage-based program available to drivers in Arizona, Alabama, Colorado, Connecticut, Iowa, Idaho, Illinois, Indiana, Kentucky, Maine, Minnesota, Missouri, Mississippi, Nebraska, New Hampshire, New Mexico, Nevada, Ohio, Oklahoma, Oregon, Pennsylvania, Tennesee, Texas, Virgina, and Wisconsin. An immediate discount of up to 10 percent is given and policyholders who drive 13,000 miles yearly or less can receive up to a 30 percent discount. IntelliDrive allows you to set safe driving rules for your teen and receive e-mail or text alerts to let you know if the vehicle is being driven outside of your safe driving guidelines. GPS also lets you know where your car is being driven. Coaching tips are offered to teenage drivers to improve driving skills. Information tracked includes mileage, time of day, speed, braking and acceleration measured through an installed telematics device plugged into your vehicle’s diagnostic port.