Technology from Driveway Software, Verisk Insurance Solutions and others allows insurers to track mileage through a customer’s smartphone.
Metromile subscribers get a hardware dongle that plugs into their car’s diagnostic port. Through this device Metromile tracks how many miles the subscriber drives. Metromile Chief Executive Officer Dan Preston has said that about 70 percent of the risk variance in car insurance is due to mileage alone.
Metromile is not alone in the mileage-based auto insurance market. Travelers, State Farm and Allstate’s Esurance are among the carriers offering products.
Metromile is also positioned to grow. It has raised more than more than $200 million over the past three years from billionaire Shark Tank investor Mark Cuban, Canadian insurer Intact Financial Corp., China Pacific Insurance Group Co., Index Ventures, New Enterprise Associates, First Round Capital and other investors. In September, it spent $22 million to acquire Mosaic Insurance, a full-service car insurance company, a move which gives it licenses in all 50 states. The deal also means Metromile will be able to handle all underwriting and claims management in-house.
CoverHound, 24 percent of which is owned by Chubb Insurance, has been expanding. In the past few months CoverHound has begun offering small business coverages and launched a cyber insurance site for small businesses.
“We recognize that our pay-per-mile car insurance customers have insurance needs beyond car insurance, such as homeowner’s or renter’s insurance, so we’re pleased to partner with CoverHound to give our customers access to a broad selection of insurance options,” said Katy Allen, director of Business Development at Metromile.
“Both CoverHound and Metromile are working to make insurance a more innovative industry, and each company has unique product offerings that it brings to the table,” said Keith Moore, CEO of CoverHound.
CoverHound’s current carriers include Chubb, Liberty Mutual, Hiscox, Progressive, Berkshire Hathaway Direct, Safeco, The General, Mercury, Hartford Steam Boiler and MetLife. In personal lines, it sells homeowners and renters insurance in addition to auto.
Metromile offers car insurance pricing to drivers based on the miles they actually drive. Metromile’s pay-per-mile model is designed for drivers who drive less than 10,000 miles a year. The company claims that 95 million low mileage drivers in the U.S. represent a potential $70 billion market. Metromile is currently available to drivers in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington.
The partnership gives CoverHound, which now operates its personal lines platform in all 50 states, another carrier’s product to offer its online shoppers, while giving Metromile the opportunity to sell its current auto insurance customers additional insurance products.
Online insurance comparison shopping agency CoverHound has announced a partnership with pay-per-mile auto insurance company Metromile to provide more coverage options for customers of both companies.