In 2021, some car insurance companies announced that customers would begin being able to pay for insurance with Bitcoin debit or credit cards.
However, there were some important caveats, and not all insurers are offering this option.
Is it really a good idea to allow Bitcoin payments? How does it work? Can you pay for Metromile car insurance with cryptocurrency?
We’ll dig into the details as well as note which insurance companies are embracing vs. rejecting this digital currency.
What Insurance Companies Allow Cryptocurrency Payments?
In order to pay your insurance bills, there are two important things that you must keep in mind.
- You must use a cryptocurrency debit or credit card.
- The insurance company must accept debit and/or credit card payments.
At the moment, very few companies accept cryptocurrency as a form of payment. In 2021, Metromile became one of the first car insurance companies in the United States to allow customers to pay with Bitcoin.
However, not all insurers are following Metromile’s lead. Some of the largest auto insurance companies in America, including State Farm, Geico, and Progressive, do not accept Bitcoin or any other cryptocurrency as a form of payment.
What Crypto Can Be Used To Pay Insurance Bills?
The most common cryptocurrency that is accepted by insurers is Bitcoin. Metromile allows customers to pay with Bitcoin, Ethereum, Litecoin, and bitcoin cash.
HOW DOES PAYING FOR INSURANCE WITH CRYPTO WORK?
How do Bitcoin transactions work? When you use a cryptocurrency debit or credit card to pay your auto insurance bill, the insurance company will automatically convert the cryptocurrency into US dollars.
Metromile does not charge any additional fees for customers who choose to pay with cryptocurrency.
However, it’s important to note that some cryptocurrency debit and credit cards do charge fees.
For example, Investopedia reports that the BitPay card charges a 3% foreign transaction fee and a $2.50 ATM withdrawal fee.
Meanwhile, the Coinbase Card does not have annual or any foreign transaction fees.
However, according to Coinbase, if you borrow USD from Coinbase or their affiliate and your Bitcoin (BTC) is sold as collateral, you would be charged a flat 2% fee for the total of the transaction.
What Are The Pros And Cons Of Paying With Crypto?
Paying with cryptocurrency has a few benefits. First, it’s fast and easy to set up a cryptocurrency debit or credit card.
Second, you can avoid currency conversion fees if you pay with Bitcoin or another cryptocurrency that your auto insurance provider accepts.
However, there are also some downsides to paying with cryptocurrency. For example, the value of Bitcoin and other cryptocurrencies is highly volatile.
This means the amount of money you have to pay could change dramatically from one day to the next.
Another downside is not all insurance companies accept cryptocurrency as a form of payment. This means you may not be able to use your cryptocurrency debit or credit card to pay your insurance bill.
Finally, there are some fees associated with using a cryptocurrency debit or credit card. These fees can add up, especially if you use your card frequently.
Alternatives to Paying Insurance Premiums With CryptoCurrency
If you’re looking for alternatives to paying your insurance premiums with cryptocurrency, there are a few options.
Pay With a Traditional Debit or Credit Card:
You could simply pay with a traditional debit or credit card. This is the most common form of payment, and it’s accepted by nearly all insurers.
In addition, paying by credit card can provide some protection if you have to file a claim.
For example, if you use a credit card to pay your premium and you later have to file a claim, you may be able to dispute the charge with your credit card company if the insurer refuses to pay.
Setting Up Automatic Payments Through Your Bank:
By setting up automatic payments through your bank, you wouldn’t have to worry about remembering to pay your bill each month.
Another option is to set up a recurring payment with your insurance company.
This option may be easier for some people, as it eliminates the need to log into your bank account every month to make a payment.
You Could Pay With a Personal Check:
Writing a check to pay your insurance bill may be the most traditional method, but it’s not necessarily the best option.
For one thing, personal checks can be lost or stolen, and if someone gets their hands on your checkbook, they could easily drain your bank account.
If you have online banking set up, you can usually pay your insurance bill with just a few clicks — and you don’t have to worry about any paper getting lost in the shuffle.
Setting Up a Payment Plan With Your Insurer:
One way to spread out paying a large insurance bill is to set up a payment plan with your insurer. This way, you can spread out the cost of your premium over a period of time.
Most insurers offer flexibility when it comes to payment options, so you should be able to find a plan that suits your needs.
No matter which method you choose, it’s important to make sure you pay your insurance bill on time. If you don’t, you could be at risk of having your policy canceled.
Is Crypto The Future Of Your Insurance Payments?
Paying your insurance bill with cryptocurrency is a great way to avoid currency conversion fees and to take advantage of the speed and convenience of using a debit or credit card.
However, there are some downsides to paying with cryptocurrencies, such as the volatile nature of the market, crypto scams, and the fees associated with using a cryptocurrency debit or credit card.
At the moment, it’s unclear if paying with cryptocurrency will become more common in the insurance industry. However, Metromile’s decision to accept Bitcoin shows there is at least some interest from insurers in embracing this new form of payment.
Luke Williams writes and researches for the insurance comparison site, Clearsurance.com. His passions include insurance and educating others on the benefits of cryptocurrency.