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MetroMile welcome package
MetroMile mails its customers a device that plugs into a slot below their dashboard to set their insurance rate by tracking the number of miles they drive.

MetroMile is a pay-by-the-mile insurance company designed to serve people who drive their cars less than 10,000 miles a year. The California-based startup launched in Portland in December 2012, with plans to move to other cities in the months that followed. As of fall 2013, it serves cities throughout Oregon.

MetroMile co-founder and CEO Steve Pretre said in an interview that as the first company to offer pay-by-the-mile insurance in Oregon, MetroMile was likely to bring a long-awaited change to auto insurance pricing that established insurance companies had resisted.

"They built their business in an era when you couldn't track this," Pretre said of the major existing carriers. "All they were doing is subsidizing people who were driving more."


[edit] Pricing

MetroMile quote screen
MetroMile's one-screen price quote tool.

MetroMile charges a base monthly fee of perhaps $20 to $60, plus a per-mile fee of perhaps 3 to 6 cents per mile driven up to 150 miles per day. (Miles driven over that daily price ceiling don't add to the insurance bill.) The number of miles driven is detected by a self-installed GPS unit (branded a "Metronome") mailed to MetroMile customers and plugged by hand into a car's OBDII port. In the U.S., this means the insurance is only available for vehicles made after 1996.

The company's website includes a simple price quote calculator.

Unlike many other car insurance providers, MetroMile includes roadside assistance service and car rental in case of a crash with all collision policies. This makes its pricing slightly more attractive to people who carry such services already.

[edit] Mission

Pretre, MetroMile's CEO, said in December 2012 that he wanted to start the company because "it has the potential to create real positive change."

"This is actually the third insurance-related startup that I'm doing, which is an odd thing for Silicon Valley," he said. "This is an industry that hasn't changed in 30 years and is ready for a force to come in and change it. ... There is a chance to create a great company that will be around for a long time and people will have a real positive association with.

"The hard challenges are the ones that are worth solving."

[edit] Part of larger risk pool

Though MetroMile's operations are (as of December 2012) backed mainly by venture capital and angel investment, it's actually selling insurance into the risk pool of Dallas National Insurance, which CEO Pretre said takes in "$400 million a year in premiums."

Pretre said MetroMile is selling risk coverage in much the way that a company like Cricket or Straight Talk might sell access to the Sprint or AT&T mobile network.

Technically speaking, MetroMile is a "managing general agent" for Dallas National, which MetroMile says has been licensed for insurance coverage in Oregon since 1995.

[edit] Data services and privacy

MetroMile dashboard
An iPad display of MetroMile's digital dashboard, which lets drivers track their driving performance over time.

One of MetroMile's primary goals is to find ways to let drivers use the data they're collecting about their own driving. The company offers customers free access to an online dashboard that tracks past trips, speeds and fuel usage.

However, the company also lets customers turn off all "mileage, speed, and similar location data" collection with a physical switch on the MetroMile device. In that case, the device will only track the number of miles driven, in order to set the rate.

"Our goal is to be able to compare your fuel efficiency [for example] to other Prius drivers -- are you more fuel efficient or less fuel efficient?" Pretre said. "Are there ways for you to combine trips in more rational ways that you can reduce your miles? ... We're trying to find ways to make that data work for them. If we're not doing a good job of that, then they won't want us to find that data."

Data about vehicles use is also valuable to the company in order to most accurately calculate drivers' appropriate risk and insurance rate.

Pretre said the company "certainly would never ever sell a customer's data directly" (MetroMile's privacy policy promises that the company "will not share nonpublic personal information with third-party companies for marketing purposes without your consent") and that MetroMile is "not in the business of selling that data" about individuals.

He said, however, that the company might eventually find ways to sell aggregate data about the behavior of all its drivers for a government or academic study, for example.

Despite that self-imposed restriction, Pretre said the company wants to make it easy for drivers to opt out of data collection.

"We certainly are very sensitive to that," said Pretre. "We put the on-off switch for it right underneath the dashboard so it's easy to find."

[edit] 'Test Drive' offer

To give Oregon residents an opportunity to see how a pay-per-mile approach to car insurance works, MetroMile announced a "Test Drive" program in early 2013. Through the program, consumers receive a Metronome device for one month to monitor the number of miles they drive and provide insight into how much they would save through MetroMile.

Drivers aren’t insured through Test Drive; rather, they are able to see how much they would save, as well as access the full MetroMile online dashboard. The MetroMile online dashboard provides the ability to visualize daily driving habits, see the cost of trips taken, understand how time of day affects commute time, compare their actual fuel efficiency to the MPG listed for their vehicle and more.

[edit] External links

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