Drive less than 500 miles a month? MetroMile brings pay-by-the-mile insurance to Portland

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Most car insurance is priced like Shari’s all-you-can-eat buffet: No matter how much you drive, your bill looks more or less the same.

Insurance startup MetroMile launched in Portland Wednesday with the dream of changing that forever.

The launch – reported today by BikePortland, and also publicized by MetroMile’s table at BikeCraft last weekend – is big news for an auto insurance industry that’s neglected this business model for years. In an interview, MetroMile CEO Steve Pretre said existing insurance companies have too much invested in the current system to start charging by the mile.

“They built their business in an era when you couldn’t track this,” Pretre said. “All they were doing is subsidizing people who were driving more.”

The company bills itself as being “for people who drive less than 10,000 miles a year.” That may be overselling it – I spent half an hour fiddling dials on MetroMile’s one-page price quote screen and couldn’t find any scenario where MetroMile could beat Progressive or Geico for someone who drives more than 6,000 miles a year. Even some drivers who only log 3,000 miles a year will find that MetroMile would cost about the same as the big providers. [Update: After this post was published, MetroMile investigated the situation and tweaked their base prices to better compete with an introductory discount offered by Progressive.]

Still, insurance is a volume-based business, and that sort of price competition is impressive for a company that’s only selling in one city so far.

Insurance is also complicated, and I’ve looked into a lot of the details on our new wiki page about MetroMile. Most striking, I think, is MetroMile’s solution to the privacy concerns that always dog pay-by-the-mile plans: Like Facebook or Mint, MetroMile is promising to make your data so useful to you that you want to let them use it.

It’s a fascinating new enterprise. Pretre says they chose to launch it in Portland first because of the city’s rich low-car culture and Oregon’s relatively innovation-friendly insurance laws. He’s hoping to roll it to other cities “in a few months.”

“This is an industry that hasn’t changed in 30 years and is ready for a force to come in and change it,” Pretre said. “The hard challenges are the ones that are worth solving.”

Feel free to ask them more about those solutions yourself – MetroMile is offering free coffee, muffins and fruit for TriMet commuters this Friday in Pioneer Courthouse Square.

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