By Jim Donovan

By Jim Donovan

PHILADELPHIA (CBS) — It’s being called the latest innovation in smart driving, pay-per-mile auto insurance.  Where if you drive very little, you pay very little.  3 On Your Side Consumer Reporter Jim Donovan finds that some drivers are already saving.

He doesn’t spend every day on a highway, and you’ll never see him sitting for hours in rush hour traffic.  In fact Adam VanCuren has a sweet gig, he says, “Right now I’m working from home.”  There’s only one problem.  VanCuren says, “My car is literally parked out front all day.”   Yet he was still paying a hefty auto insurance bill.  The cost?  He says, “I was paying close to $130 a month.”   That’s until a company called Metromile entered the picture.

“Maybe you bike to work or you take the train to work.  It means that you’re probably not using your car very much.  So per-mile insurance will save you a lot of money when you’re not using your car,” says Metromile CEO Dan Preston.  Metromile is a pioneer of what it calls pay-per-mile auto insurance, offering low-mileage drivers a cost saving alternative. According to Preston, “The best customer for Metromile is somebody who drives under 10,000 miles a year.”

So how does it work?  Well a customer’s monthly bill is broken down into two parts.  The first part is a flat base-rate which is determined by a number of factors, including how many years you’ve been driving, the kind of vehicle you have, and your accident history.

The second part of the bill is a per-mile rate where you pay a few cents for each mile driven.  In VanCuren’s case, he says, “Right now I’m paying like $35 a month and 7 cents a mile after that.”

Since he only drives about 60 miles a month his mileage charge is less than 5 bucks!  After switching to Metromile his total insurance bill each month with liability and collision dropped from $130 to around $40!  He says, “It’s very affordable.”

A wireless device called a “pulse” plugs into a port under his dashboard.  It doesn’t transmit information about how he drives, but it does track the miles driven.  Metromile CEO Dan Preston says, “So in effect you pay for what you use.”

Daily charges are capped at 150 miles per day.  The mileage data as well as diagnostic information about the car can be accessed online or through the Metromile phone app.

But simply put, it’s the price that’s grabbing attention.  As VanCuren says, “If I’m saving money, why not spread the word.”

Pennsylvania is the 6th state where Metromile is being offered.   The company is expanding and hopes to be available in New Jersey by the end of the year.  No word yet however on when coverage might be available in Delaware.

 For more information on Metromile visit: