The new deal with Metromile fills that gap by offering pay-per-mile coverage for drivers when they don't have customers. To use it, drivers plug a Metromile-assigned dongle into their car's ODB-II port, letting the insurer track personal versus commercial miles and charge accordingly. Metromile offers full coverage during those periods and says many drivers may even save money, assuming they don't use their vehicles excessively off the clock. All that said, Uber drivers won't be forced to take the coverage, and have other options including Farmer's Insurance.

Uber and Metromile needed to convince state regulars to accept the deal, and so far, three are on board: Illinois, Washington and California. The latter state recently declared that it would force Uber drivers to purchase commercial insurance, but has now backed off. The new deal addresses a lot of Uber concerns around insurance, but there's no word yet on whether Metromile will sign other car services to the same terms.

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