Car insurance always seems to be a headache. You’re always paying too much or struggling to fight a claim, and you never seem to be able to get on top. That’s where the convenience of pay-per-mile insurance plans comes in.
However, this new type of insurance plan created some interesting hiccups when it came to being a rideshare driver. Drivers for ride services are typically required to purchase their own personal auto insurance, but in the past, they haven’t qualified for pay-per-mile insurance because they drive too much during ride sharing. That’s not as much of a problem with a new partnership between Metromile and Uber.
Uber and Metromile’s Partnership
Pay-per-mile insurance sounds too good to be true for rideshare drivers. To qualify, you have to drive less than 10,000 miles per year. A relatively new startup insurance company known as Metromile offers this insurance, which means that if you don’t drive very often, you won’t have to pay much for insurance. But until recently, rideshare drivers were exempt from using it.
The recent deal between Metromile and Uber makes insurance for ride sharing easier for consumers. This is thanks to a special feature within the app that connects to Uber’s database and determines which of their drivers have pay as you go insurance. As a result, Metromile will only charge drivers based on the miles they drive for personal use.
Ultimately, the partnership has measures in place that make it possible to keep track of when drivers use miles for personal use and when they use them for ride share driving. That way, it only charges consumers for the miles they use personally. The chip will count all of the miles, but it will subtract any miles used during ride sharing so that consumers are only billed for the miles used personally.
Metromile’s Smart Move
Metromile is one of the first auto insurance companies to even consider the ride sharing scene. This makes all the difference for rideshare drivers, who have an extremely hard time finding insurance that will keep them at a reasonable rate. Most insurances will simply drop rideshare drivers or raise their rates significantly.
This particular partnership makes sense in a lot of ways for that reason – the most important of which is putting consumer minds at ease. With this particular deal, those who don’t drive very often will be able to avoid overpaying for insurance that they rarely use. It’s a brand new market, and Metromile is paving the way, giving them a significant advantage against those trying to replicate the service.
Metromile and Uber’s partnership is the first of what we can assume will be many partnerships looking to capitalize on the ridesharing market. Though no such deal exists outside of Uber currently, we can expect this kind of agreement to extend to both other insurance companies and to other rideshare services, such as Lyft and Sidecar in the future.[amazon template=iframe image&asin=B011ZCUA2Y]