How does Pay As You Drive Insurance work

Usage-based insurance tracks your mileage and/or driving habits. Mileage is tracked by either a small wireless device that plugs into the OBD-II port in your car, using OnStar (on equipped GM vehicles), a Bluetooth device or smartphone apps. Mileage is automatically reported to the insurance provider. In most cases, a smartphone app provides immediate feedback and drivers are able to track their mileage. Both plug-in devices and OnStar utilize telematics, the technology of sending, receiving and storing information relating to remote objects (your car) through telecommunication devices. Telematics have the ability to track how many miles you drive as well as driving behavior. In short, telematics make usage based insurance possible. Additionally, telematics can use GPS capabilities for mapping, accident information, fuel monitoring, alerts for street sweeping and roadside assistance. Telematics can be extremely accurate for tracking driving miles. Depending on the provider, devices can also be used to track driver’s performance. Metromile tracks only mileage, believing that the less you drive, the safer you are and the less risk you pose.