A while ago I was looking into car insurance options because FireBear and I considered moving to NJ for tax purposes. NJ Taxes < NY taxes. After wading through the intriguing market of car insurance, we found a pretty interesting company. Though we ultimately didn’t move to NJ, our research was not for naught as I can now write about it on our blog.
The problem with having a car in a metropolitan area is that you’re subsidizing everyone else who is putting a ton of miles on their car. If you’re not driving all that much, why should you be paying a similar rate? I’m a little shocked that there aren’t more companies who charge less for insurance for those who don’t drive as many miles. With all the statisticians and data analysts out there, why isn’t this more of a thing? The more miles you drive, the higher the probability of getting into an accident. Remember, you might be the best driver out there, but you can’t predict the actions of everyone else on the road.
The only company we found that could do this was Metromile. They charge you based on the miles you drive, which is pretty interesting. You get a little electronic device you plug into your car dashboard and it tracks how many miles you drive.
If you’re planning a road trip, it’ll only charge you for 250 miles max per day, unless you’re in NJ where you only get charged 150 miles per day max. So if you can drive long distances in one day, you get free insurance miles :D!
I can see why a startup would choose to only insure large cities first. Cars in cramped cities don’t get to very high speeds due to traffic, grid systems allow for more breaking and stopping, and less mileage is driven in large cities.
You SHOULD NOT BE using Metromile if you’re driving more than 10,000 miles a year (same as 28ish miles a day) — you’d probably end up paying more money. If you live close to work though, you should get a quote and see if it’s cheaper. On average, they say users save $500. If you’re driving less than 2,500 miles a year, you’d save $650 on average. For those who drive 5,000 miles or less, it’s $500, and for those who drive 10,000 miles or less, it’s $300 saved.
Unfortunately, it’s not available in all states. It’s looking to get into states, but are only in the ones below for the moment:
- New Jersey
I have no clue why NY is not on this list. People in Queens, Brooklyn, and Long Island have cars and drive to work and this would be a great pay-per-mile incentive. I think people here would jump at the opportunity. This is a giant market. Maybe red tape? I also personally want this to happen so I can get cheap insurance :P. C’mon, bring it to NY already!
Of course, check this against your current insurance provider and don’t just blindly trust a company’s words!
Their website makes it pretty easy to check your rate. We input potential NJ info at the time and the form took us less than 5 minutes to fill out and get a quote and since we’d only be driving a few miles per day, it beat the “normal” rate by a ton.
I currently use Oscar Insurance, which costs me ~$160 per month with a $1 discount every day I walk more than 10,000 steps, up to a max discount of $240. The deductible is $7,500, but there’s a free phone line to call doctors if I need antibiotics, ear infection meds, and other simple treatments. There’s a free gyno, physical, and routine blood tests. I’m fine with this insurance because I basically never go to the doctor. I’m only interested in catastrophe care.
I should note that I’m 25 and this plan is only for those under 30. Once you get to 30, this plan balloons to $470 or so (I don’t recall the exact number). Can we please fix healthcare before then…? If you’re under 25, you should consider them since they’re the best deal I could find. I didn’t look for people 30 and older though so I’m unsure where to go for that.
Oscar is only available in the below cities:
Would the incentive process of driving less not be similar to exercising less and eating better? Clients could wear a Fitbit and the insurance company could track exercise if they hit a certain heart rate. For those of us with contacts or glasses, maybe they could create recording devices in it and a computer could process what kind of food it was. Some other kind of technology can track if you’re eating organic or not by what you buy on your credit card.
If we give a discount to people every time they exercise or eat healthy foods, possibly measured by:
- different amounts of money discounted for organic
- veggie ratio to plate
- red/other kinds of meat
- fat, carb, and sugar content, etc.
Maybe there are regulations that I’m not aware of that disallow this. It would also be a bit difficult for an insurance company to process what kind of food you’re eating I feel. But the exercise/Fitbit seems definitely possible today. The rest seems a bit too futuristic right now. But who knows, right? Maybe in a decade or earlier when I retire they’ll have solved this. Or if I get really bored, maybe I can get someone to fund it and work on it?
Of course, if a person is already sick or legitimately can’t exercise or eat healthy, then they should be given a fair rate. Perhaps a doctor’s note for cases like that?
I don’t have as good a hack like Metromile for healthcare yet, unfortunately. I just get catastrophe insurance in case I end up with cancer, appendicitis, or end up in the emergency room, which is as close as I can get to optimizing right now short of moving to Europe and becoming a dual citizen for free healthcare in the future. Don’t worry, I’ll keep looking. One of these startups has to invent a new system eventually, right? If you’d like to take the above idea about discounts for exercise and food, please take it and let me know when I can sign up for discounted healthcare:).
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