By Jon Delano

PITTSBURGH (KDKA)- Automobile insurance is often the most expensive insurance that a person must buy, especially if the car isn’t driven a lot.

“Right now, I’m working from home,” says Adam Vancuren, a Pennsylvania driver.

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Vancuren felt he was spending money for nothing.

“My car is literally parked out front all day,” he said.  “I was paying close to $130 a month.”

So, when the state insurance commissioner recently approved a California-based company called Metromile to offer auto insurance in Pennsylvania, Vancuren jumped.

“Metromile is about per-mile insurance. So, you pay for what you actually use, instead of one flat-rate,” says Metromile CEO Dan Preston.

Preston says it’s perfect for people like Vancuren who don’t use their cars a lot.

“Metromile is all about giving you an insurance policy that fits your lifestyle. So, for low-mileage drivers, right now, 65 percent of drivers are driving under 12,000 miles a year, which means they are subsidizing the other 35-percent of drivers who are high -or those who are regular T and bus riders, especially in Pittsburgh,” Preston says. “It’s a great city with a lot of public transit. So, there are a number of drivers who are using their cars for purposes other than commuting every day.”

Vancuren tells KDKA Money Editor Jon Delano that his first bill dropped from a $130 a month to just $33.

He’s paying around seven cents a mile.

So, how does it work?

Depending on the coverage chosen, the Metromile bill reflects a basic monthly premium and a per-mile charge.

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What those rates are depend on the car driven, the length of someone’s driving history, accident history, age and location. It’s traditional insurance criteria, but mileage driven is really key.

“At the end of the month, you’ll pay for your insurance by calculating the base rate, plus the number of miles you drove times the per-mile rate.  So, in effect, you pay for what you use,” says Preston.

Local independent insurance agent Tom O’Malley says Metromile may work for some, but depending on your situation, other insurers can beat the rates.

“Insurance companies now do look at the mileage use in the rating,” says O’Malley.

But another benefit, when you sign up with Metromile, a device gets plugged into the diagnostic port in the car.

“The device has the ability to send back the number of miles that you are driving, along with diagnostics about your car,” says Preston. “So, one of the things that we will do in addition to the insurance is give you an app that helps you understand what’s going on inside your car.”

Besides miles driven, the app on any smartphone will figure out the car’s fuel use, maintenance issues, engine alerts, trips taken, street sweeping on the street and even where the car is parked.

In the end, what really counts with auto insurance is how well the car is serviced if it was in an accident.

“We work with a very large insurance company called National General Insurance that provides the backing for our product,” says Preston. “They are able to service the product in a way that insures they are always there for your claim.”

Preston says Metromile takes servicing claims very seriously.

While it’s too early for Metromile to have much of a record here in Pennsylvania, the company says it wants to hear from customers who have any claims problems at all.

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