Ford partners with Metromile for pay-per-mile insurance on new cars

Metromile CEO Dan Preston

Winni Wintermeyer

Ford is giving new car buyers a way to save money on insurance now that millions of Americans are working from home and driving less than they were before the coronavirus hit the U.S.

The automaker said Thursday it is partnering with start-up insurer Metromile to give drivers easier access to the company’s pay-per-mile insurance offering. When drivers sign up on Metromile’s app or website, the odometer on their new Ford will immediately connect to Metromile’s software, which will start tracking miles.

Car insurers have faced controversy in the six months since Covid-19 forced offices around the country to close and put an end to live events and group gatherings. Major insurers said in April that they would start providing refunds, credits or rate cuts to customers because of the plunge in drive time, but a number of class-action lawsuits have been filed by consumers who said they should have been given bigger discounts.

“Having a product that helps people save money in a time like this is really important,” said Metromile CEO Dan Preston. We “build products catered to specific individuals as opposed to insurance products built for classes of drivers.”

The announcement comes a day after Ford said it’s looking to slash at least 1,400 jobs, as it cuts staff in underperforming areas while investing in new technologies.

Targeting infrequent drivers

Founded in 2011, Metromile allows anyone to sign up for its product online, regardless of what kind of car they drive. Preston said the company targets the two-thirds of people who drive less than 12,000 miles per year, which he calls the break-even point. In other words, anyone who drives less than that should save money with Metromile versus traditional insurers. 

Thursday’s announcement said eligible Ford owners can save $741 a year on average, based on a recent survey of Metromile customers.

Preston said Ford is the “most forward-looking” of the major manufacturers in baking the product into its cars, but he expects other partnerships to emerge. The company says the number of Teslas insured by the company has grown 191% in the last two years.

To date, Metromile has tracked the number of miles driven through a separate device that plugs into the car’s diagnostics port. The new embedded Metromile offering is available only on new Ford cars that have connected systems open to outside developers. That includes most Fords from the 2020 and 2021 model years, the companies said.

Metromile Pulse and mobile app


Metromile, based in San Francisco, is generating over $100 million in annual revenue, Preston said. Sales plunged in the early days of the coronavirus because driving went way down. However, in the subsequent months many people went back to work and chose to drive instead of taking public transportation. Metromile also attracted new customers who were driving less and looking for cheaper insurance than they were getting from Allstate, Geico and Progressive

“A lot of changes are very likely not temporary,” Preston said.

Metromile has raised about $300 million in private capital, including from insurers Tokio Marine Holdings and Intact Financial, and venture firms NEA and Index Ventures. Insurance-technology companies are still trying to prove that they can employ software, algorithms and an upgraded user experiences to bring down costs for consumers while also generating a profit in a low-margin industry.

In July, insurance-tech company Lemonade, which offers insurance to renters and homeowners, held its stock market debut. The company has a $3 billion market cap. Revenue more than doubled in the second quarter to $29.2 million, but Lemonade still reported a net loss of $21 million.

WATCH: Lemonade CEO Daniel Schreiber on the company’s outlook and earnings

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