• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Personal Profitability Logo 2016

Personal Profitability

Personal finance for hustlers and entrepreneurs

  • Start Here
  • About
    • Personal Profitability Bootcamp
    • Create Your Website in 5 Minutes!
    • Profitability Resources
    • Media & Interviews
  • eBooks
    • The Personal Profitability Complete Beginner’s Guide to Personal Finance
    • Personal Finance Arsenal eBook
  • Blog
    • Income Reports
  • Podcast
  • YouTube
  • Contact / Work With Me
    • Profitability Coaching

Insurance

Is Pay Per Mile Right for Me?

August 23, 2021 by Eric Rosenberg

If you had told me four years ago that my car insurance was about to go down by half, I might not have believed you. But that’s exactly what happened when I dropped my traditional car insurance and switched to Metromile.

Here’s a look at exactly how pay per mile insurance works, when it makes sense, and how it saves me money every single month compared to my old insurance policy.

How pay per mile is different from traditional auto insurance

With old-school car insurance, you pay a fixed amount every month to insure your car. While it’s important to have comprehensive coverage that meets your needs, with traditional insurance policies, you have to pay the same amount whether your car is sitting around at home or driving back and forth to work and running regular errands around town.

Pay per mile insurers realized that you probably will not get into a car accident when your car is sitting still, so you shouldn’t have to pay as much if your car is parked.

With pay per mile, you unbundle the cost of insuring your car while sitting around and insuring it while driving it around. This means people who drive less will save a lot. People who put a lot of miles on their cars might do better with traditional insurance. Your driving habits are the main factor in which type of insurance makes the most sense for your unique needs.

When pay per mile car insurance makes sense

With traditional insurance, you always know exactly what you’re going to pay for coverage each month, but you won’t save anything if you drive a lot less, as many of us are since the start of the COVID-19 pandemic. Even many people who drive to the office five days per week could save with pay per mile, but those who now work from home full-time or part-time may be more likely to find significant savings.

With pay per mile, you pay a much lower fixed rate every month and pay a few cents for every mile you drive. If you drive more, you pay more. If you drive less, you pay less. Anyone who drives less than 10,000 per year may be able to save money with pay-per-mile. During COVID and beyond, there’s a very good chance that includes you.

This kind of insurance isn’t right for everyone, but for many people, particularly those who work from home or have very short commutes, pay per mile could save you a small fortune compared to traditional insurance. College students, seniors, public transit riders, and anyone who drives less than 30 miles a day on average will save.

For me, switching to pay per mile insurance with Metromile led to huge savings. Honestly, my only regret is that I didn’t switch sooner!

How I saved half with pay per mile insurance

The welcome email I received from Metromile when I signed up on August 10, 2016.


As a personal finance writer, I’m a big fan of saving money – but who isn’t? One of my favorite parts of getting married was saving money every month on my car insurance. But even having tied the knot and proven that I was a low-risk driver, my wife and I still had to pay what felt like an arm and a leg to stay insured.

It was actually a bad customer service experience that led us to shop around and discover Metromile. While bundling and “saving” with our previous insurer, we paid $155 per month for our two cars and two drivers with perfect records for about a decade.

Our original Metromile quote from 2016 led to a rate of less than $1 per day per car

We both drove old, paid-off cars, and neither had (or have) a regular commute. That means we didn’t rack up a lot of per-mile charges regularly. However, if we do decide to take a road trip, there’s a limit to how many miles we pay for per day. If you go over 250 miles in a day (or 150 if you live in New Jersey), any additional miles are free.

For October 2016, our first full-month bill with Metromile, we paid just $87. That’s a fairly average bill for us. However, we have some months where we’ve paid less than $60. Assuming an average bill of $85 per month, which we generally paid our first year at Metromile, that’s a 45% savings, or nearly half!

The Metromile app has all of our billing details. We can see how many miles we drove and even maps of past trips. It also includes useful features like gas mileage tracking and information about any engine error lights from your car’s computer.

Our costs have crept up very slowly over time, and we got a new car, so now we pay around $100 per month to insure both cars. But our most expensive month ever with Metromile when we’ve taken long road trips have always been less than what we paid to our old insurer.

Over the four years we’ve been with Metromile, I estimate that we’ve saved about $3,000 so far, and that would be assuming our old car insurance company wouldn’t have raised their rates, and they almost certainly would have. Thanks to dumping our traditional car insurance, we can add more to our savings every month.

Are you living the pay per mile lifestyle?

You may already be living the pay per mile lifestyle and not even realize it! We saved money driving an average of around 700-800 miles per month between the two of us. That’s about 25 miles per day. But even if we had driven quite a bit more, we still would have saved.

Take a look at how much you really drive in a typical month. You may be able to save hundreds of dollars per year. Pay per mile can make it work. You decide what to do with the savings.

(This post was written by me and includes my own opinions, but was coordinated with Metromile.)

Filed Under: Insurance

How Your Insurance Rates Are Calculated

March 25, 2021 by Eric Rosenberg

Recently I was on the hunt for car insurance. Many people do not understand the factors that impact their insurance rates, and my research brought out some important things to know in the unknown world of insurance premiums.

Health Insurance Rates

Health insurance is a beast of an industry. While I am a big proponent of public healthcare, that is not the world we live in (if you are in the United States). Health insurance rates can be calculated using one of two methods.

If you work for a big company, your employer will negotiate a blanket rate for everyone at the company. This is based on factors such as the average age of employees, fitness levels, and so on. Your employer will generally pay a portion of your premium every month and you pay the rest. Every company is different, and you have little, if any, control over how this is handled.

If you need to find your own health insurance, a formula is used to determine your individual plan rates. The major inputs are your age, weight, family health history, your health history and pre-existing conditions, tobacco and alcohol use, past surgeries, and other major risk factors for health care costs.

Auto Insurance Rates

The auto insurance industry has done extensive research to find correlations between people and driving safety. It turns out that the statistics are pretty solid, and the industry prices insurance based on your risk factors.

The major factors for auto coverage are your age, gender, driving history, marital status, credit score, home zip code, and your car’s make, model, and color. If you are a seventeen year old boy that has had several accidents, lives in a dangerous neighborhood, and drives a cherry red Mustang convertible, your rates are going to be higher than a fifty year old married woman driving a 1980s station wagon. It makes sense.

The down side is that you could be a really safe seventeen year old boy and still get hit with high rates because other seventeen year old boys get into lots of accidents.

Renter Insurance Rates

I have renter’s insurance. I highly recommend all renters get a policy to cover your belongings. Landlords have insurance to cover the property, but your stuff is not covered by that policy. If there is a floor or fire and your possessions are destroyed, a renter’s policy pays to replace your stuff.

Renter’s policies are rated based on the location of the property, construction and building style, size of the property, type of property (apartment or single family home), and certain policy exceptions. Discuss this in detail with your insurance agent to make sure your coverage meets your needs.

Homeowner Insurance Rates

Homeowner’s policies cover the building and the contents of the building. The factors are very similar to renter’s policies, but the premiums are higher because you are covering the building and the contents.

Generally homeowner policies are bundled into mortgage payments so you just make one payment per month for your house. Property taxes are often included as well.

If you live in a neighborhood with high crime rates, your insurance is going to be higher than a safe suburb. If you live in a wood frame house, your policy will cost more than a brick or steel constructed building. These risk factors take into account the likelihood of a loss or claim.

Complex, But You Have to Understand It

The insurance world is complex. While your agent might seem like your friend today, the idea of an insurance company is to make a profit. To make a profit, they try to maximize what you pay in and minimize what they pay out.

Make sure you find a trustworthy, highly rated, well regarded insurance company. All insurers are not alike. Some people have horror stories where companies would not pay out for a claim. Others have stories about helpful agents walking them through the entire process. Read a lot about the company when you are making a selection.

Determining Insurance Premiums- PersonalProfitability.com

This post was originally published on April 27, 2011 and updated on March 23, 2021.

Filed Under: Budgeting, Insurance, Real Estate Tagged With: Financial Services, healthinsurance, Home insurance, Insurance, Owner-occupier, Risk factor, United States, Vehicle insurance

When to Get Life Insurance

June 18, 2019 by Eric Rosenberg

Like most people in their 20s, I am at an interesting point in my life when it comes to life insurance. I can get a policy now for the lowest price ever again, yet I don’t feel compelled to get it yet. Here is the logic behind why I probably should get life insurance, and when it is best to sign up.

[Read more…] about When to Get Life Insurance

Filed Under: Insurance Tagged With: Insurance, life insurance

Picking the Right Life Insurance Policy: How Well Do You Know Life Insurance?

August 4, 2017 by Eric Rosenberg

Choosing the best life insurance policy is key to your family's long-term financial stability. While we all know that life insurance is important, it can be tough to pick the best policy for your needs while keeping costs low. I recently teamed up with the amazing people at Health I.Q. to put together this life insurance policy quiz. Follow along to test your life insurance IQ and find if you know what you need to pick the best life insurance policy.

[Read more…] about Picking the Right Life Insurance Policy: How Well Do You Know Life Insurance?

Filed Under: Insurance

How Insurance Companies Make Money

April 3, 2017 by Eric Rosenberg

Every month, you pay a premium to your auto insurance company to stay insured. If you are in an accident, the insurance company pays for the damages. If the insurance company pays out more in claims than it takes in premiums, many people would think the insurance company lost money, but that is almost never the case. Even if the insurance company pays more in claims, it could still be quite profitable. Read on to understand how insurance companies make money.

[Read more…] about How Insurance Companies Make Money

Filed Under: Insurance

Term Life Insurance is a No Brainer for Millennials

October 3, 2016 by Eric Rosenberg

This article was sponsored by SelectQuote, but all thoughts and opinions are my own. If you enjoyed it, give it a share with the hashtag #SQinsurance!

Millennials are proving to be a unique generation dealing with personal finances. Despite our YOLO reputation, Millennials are proving to be bigger savers and 401(k) investors than our Generation X predecessors, but it is easy to forget about life insurance. Life insurance is a key part of personal finance, and Millennials are in the best position to take advantage.

[Read more…] about Term Life Insurance is a No Brainer for Millennials

Filed Under: Insurance, Special Features Tagged With: SelectQuote

  • Go to page 1
  • Go to page 2
  • Go to page 3
  • Go to page 4
  • Go to Next Page »

Primary Sidebar

Connect with Me!

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Join the Email List

This field is for validation purposes and should be left unchanged.

Subscribe to get on the path to Personal Profitability

  • Bootcamp
  • Podcast
  • YouTube

I started a little side hustle blog in 2008, and left my full-time day job as a Senior Financial Analyst to turn my side hustle into a full-time gig. Learn how I did it so you can build your side hustle. It all starts with the first dollar.

Copyright © 2022 · Narrow Bridge Media, Inc. · All Rights Reserved

Go to mobile version
 

Loading Comments...
 

You must be logged in to post a comment.