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 2011 and provides auto insurance targeted to drivers with low yearly mileage. Coverage is currently available in Arizona, 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 register on the MetroMile mobile app, which tracks your mileage for a period of 17 days to establish a unique base rate and per-mile rate for the driver. 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 per day are free (150 per day in New Jersey), so you don’t have to 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 savings on auto insurance goes to drivers with less than 10K annual mileage (or, less than 28 miles per day), with the average customer saving $741 per year. Coverage options include:
- Bodily injury
- Property damage
- Uninsured and underinsured motorist coverage
- Medical payments coverage
- Personal injury protection
- Rental reimbursement
- Emergency roadside assistance
- $250, $500, and $1,000 deductible options
The Progressive Insurance usage-based option is call Snapshot, which is available in all states except California and North Carolina. Drivers choose between a plug-in device or a mobile app to record their driving habits. Driving factors recorded by the Snapshot device/app include the miles driven, time of day, hard-braking incidents, or hard-cornering incidents. Speed is not recorded.
The company evaluates the data of a 30-day driving period and then, if you qualify for a discount, it will be applied to your policy. Snapshot users can expect to save an average of $145 per year on auto insurance.
Launched in 2010, Allstate’s Drivewise program offers discounts of up to 30% to auto insurance customers in most states (New York drivers are not eligible). This program also uses a mobile app to track speed, mileage, hard-braking, and other driving habits. Since the app is linked to a driver's mobile device and not the vehicle itself, you will need to manually delete trips where you are not the driver.
For drivers who initially qualify to receive the discount, additional savings can be earned and deducted from your policy premium every 6 months. To receive the maximum safe driving discount, drivers should avoid driving 80 mph or above; driving more than 12,000 miles 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 telematics app.
SmartRide is Nationwide’s usage-based program and offers discounts to its policyholders of up to 40% with an instant discount of 10% for enrolling. After you install the device in your vehicle, the discount is updated weekly. After the 4- to 6-month evaluation period, you mail the device back and the final discount is locked in and applied to your auto policy upon renewal. There is also a mobile app option with SmartRide.
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 program will only be used to qualify for a discount and will not increase your auto insurance premium.
DriveSense is the Esurance usage-based program available in 35 states with plans to expand. Drivers save an automatic 5% upon enrollment in the program. The mobile app tracks braking incidents, mileage, driving hours, speed, and acceleration. It maps your driving (literally) and allows you to view your driving patterns and behaviors based on the factors determining your discount. This will allow you to make any adjustments to maximize your discount.
The DriveSense app automatically starts collecting data when your car starts moving. You can delete trips where you or another member on your policy aren't the drivers. The app also has a "standby" mode that you can activate if you're a passenger in your vehicle or someone else's, taking public transit, biking, or during travel. Drivers who are on your Esurance policy and enrolled in DriveSense must log a cumulative 50 trips per term in order to gather enough telematics data to customize your discount.
Safeco’s Rewind program is actually an accident forgiveness program that reduces or eliminates premium surcharges for accidents or tickets if drivers are willing to share their driving data. The advantage comes in not having to wait for 3 to 5 years for an accident or ticket to fall off your driving record. Instead, you can sign up for an evaluation period through an installed telematics device and have the charges reversed immediately. If you’ve had accidents or tickets, the 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’ 90-day 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, Virginia, and Wisconsin. The mobile app tracks speed, acceleration, hard braking, late-night driving, and, in some states, distractions such as handheld calls and texting. An immediate discount of up to 10% is given and policyholders who drive 13,000 miles or less yearly can receive up to a 20% discount (in most states) upon renewal of their policy. (Those in Nevada can save as much as 40% and drivers in Illinois and Oregon can save up to 30%, while Florida drivers save up to 15% and Massachusetts, just 3%.)
IntelliDrive allows you to set safe driving rules for your teen driver and receive email 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 when you're not in it, although location data collected through IntelliDrive does not impact your insurance premium. Coaching tips are offered to teenage drivers via the app to improve driving skills.