Share story

Insurance companies use all kinds of data when deciding what to charge people, including traffic tickets, crashes, age, car value, even credit ratings.

But the industry has taken longer to make use of an obvious fact: The less you drive, the less chance you’ll crash.

On Tuesday, a new variant of “pay as you drive” insurance will be offered in Washington state by MetroMile, which has operated in Oregon since December.

MetroMile gives customers a tracking device called a Metronome, which docks beneath the dashboard in the same port mechanics use to plug in diagnostic tools.

“The typical rate is going to be $20 to $45 a month, plus two to five cents a mile,” said CEO Steve Pretre.

MetroMile could save its customers money if they drive fewer than 10,000 miles a year, he said.

The company’s rates were approved by the Washington state insurance commissioner on Sept. 15, state records show.

The option to buy low-mileage insurance emerges at a time vehicle miles per driver have declined nationally, since a peak around 2004.

Nationally, about 20 companies sell mileage-based insurance in some form, industry reports say.

A target market is “a younger individual or younger couple living in a city,” Pretre said. Perhaps they take transit or bike to work, then use the car for errands and weekend trips, maybe 2,000 to 5,000 miles a year, he said.

“The less you drive, the more you save.”

Oregon has eight companies that sell pay-as-you drive insurance: Allstate, American Family, Liberty Mutual, MetroMile, National General Assurance, Progressive, State Farm and The Travelers. All eight include a device to log miles driven. Usually, these companies give discounts, but MetroMile says it’s the only insurer that bills directly per mile.

Progressive, the best known of these programs, considers not only how far you drive — but how you drive. Acceleration and braking data show whether the client is a smooth operator.

Washington insurance regulators observed that MetroMile equipment is patterned after Progressive’s “Snapshot” data collector, but MetroMile doesn’t intend to monitor driving behavior, only the distance traveled.

In-car logging devices create a potential for invasions of privacy, depending on how companies use them.

MetroMile puts more weight on usage than competitors do, counting miles traveled for half the bill, said CeCe Newell, policy analyst for the Oregon Insurance Division.

“MetroMile really is different,” she said.

Pretre wouldn’t divulge how many customers he has in Oregon, and the state won’t get an annual report until after year’s end. Oregon authorities have received zero consumer complaints, Newell said.

Metronome provides apps that can tell users other details, such as fuel efficiency and an engine’s condition. People can obtain those even without the insurance, Pretre said.

Usage-based insurance has long enchanted environmental wonks, who tout the inherent reward for curtailing car trips.

Former King County Executive Ron Sims dreamed of such a program when in 2007 the county, the state and Unigard Insurance announced a $1.9 million federal grant to experiment, using GPS devices.

“Pay As You Drive could revolutionize how people use their cars and be a powerful tool for improving mobility, improving air quality and reducing global warming,” Sims said.

But only seven people signed up, causing the program to fizzle after only $17,000 was spent, according to the Public Data Ferret blog. Technological challenges were tougher than expected, Pretre said.

A Texas startup called Milemeter, which charged drivers for 6,000 miles a year plus a per-mile rate, lasted from 2008 to 2012.

Karl Newman, president of the Northwest Insurance Council, said that
auto insurers have tried for years to differentiate policies to give each person a fair rate based on individual facts.

“Usage-based insurance is on its way to becoming a standard offering,” he said.

It’s an interesting business plan. MetroMile’s policies will incentivize people to pay for less of its product. Pretre said users tend to reduce their miles 8 to 10 percent, once they change over.

He argues that in the long run, if people are happy with savings, they will be loyal customers and will tell their friends to sign up.

Mike Lindblom: 206-515-5631 or On Twitter @mikelindblom