How To Pay-Per-Mile Car Insurance

Feb 01, 2023 By Triston Martin

Your monthly payment for your auto insurance policy with pay-per-mile coverage will change according to how many miles you travel. For those looking for a car service that only offers pay-per-mile coverage, the most well-known option is Metromile. Nationwide and Allstate, two insurance industry heavyweights, have recently begun offering pay-per-mile coverage to customers in many states.

Contrast this type of coverage with behavior-based insurance, which considers mileage and driving style. While Root is the most well-known provider of behavior-based auto insurance, traditional insurers are also rapidly developing similar initiatives.

While pay-per-mile and behavior-based insurance plans are certainly novel, there may be better fits for your needs. If you need assistance sifting through your auto insurance alternatives, MoneyGeek can help.

Define "Pay-As-You-Drive" Insurance for a Car

In terms of auto insurance, they are ideal for those who drive infrequently and rarely more than 10,000 miles per year. Pay-per-mile insurance considers how often you drive instead of basing your premium entirely on fixed characteristics like age, where you live, and driving record. These plans increase your regular premium by a set amount per mile driven (usually a few cents).

Metromile is a leader in the pay-per-mile insurance market. Pay-per-mile insurance plans are available in some areas through well-known carriers, including Allstate, Liberty Mutual, and Nationwide. It's important to differentiate between pay-per-mile programs and behavior-based insurance, the latter of which monitors your mileage and your safe driving habits. Exactly how does mileage-based auto insurance coverage function? Is It Worth It to Buy It?

MoneyGeek found that pay-per-mile auto insurance is the least expensive option for occasional drivers. An example of a pay-as-you-go insurance policy is as follows: An insurance company determines your base rate and your mileage rate. Your base rate and per-mile cost will vary based on factors such as age, region, driving record, and insurance provider.

Suppose you're offered a rate of $60 monthly plus 10 cents per mile from your insurance company. Monthly costs of $180 are broken down as follows: $120 for mileage driven (40 miles a day), plus $60 for the basic rate.

Should You Get Insurance Based on Your Mileage?

More evidence Keep in mind that it can be difficult to get a policy that offers pay-per-mile coverage if you're interested in this option. Only eight states currently have Metromile available to them. Unfortunately, pay-per-mile insurance is only offered by three of the largest insurance companies in the country, and it is only available in select states. Some states, including California, have outlawed pay-per-mile auto insurance contracts, but there are still options for insurance based on the driver's actions.

Where can I find the most affordable per-mile coverage? Our top choice for pay-per-mile coverage is Nationwide. In terms of availability, what is pay-per-mile car insurance? The company's SmartMiles program was the most widespread of the pay-per-mile options MoneyGeek reviewed, with coverage in 40 states across the US. In addition, SmartMiles monitors policyholders' driving habits and rewards them with money-saving discounts.

What is pay-per-mile insurance?

To set your monthly base cost, the carrier often uses characteristics such as gender, age, and automobile make and model; why choose pay-per-mile car insurance similar to a regular car insurance quote? Although pay-per-mile car insurance differs from a regular auto insurance policy, pay-per-mile car insurance offers the same coverage options, such as liability car insurance and medical payments coverage.

We choose Nationwide's SmartMiles program over the other three. This option is not only cheap and convenient, but it also provides users with discounts for safe driving.

Pay-as-you-drive auto insurance may help you save money. Still, before you commit to a policy, it's important to look at each potential insurer's financial security, service quality, claims process, and customer satisfaction ratings.

How your driving is tracked

If you're uncomfortable exposing your data, Mile Auto offers pay-per-mile insurance without requiring a plug-in device. Instead, you'll need to give the carrier a photo of your odometer once a month.

If you rarely use your vehicle, paying for insurance based on how far you drive may be worthwhile. Metromile's sample prices imply that customers who travel less than 26 miles per week could benefit financially from a pay-per-mile approach.

When using a pay-per-mile insurance plan, how is the total cost determined? Pay-per-mile insurance products have two components: a base charge and a rate per mile driven. These prices are determined by the same factors—location, age, and driving record—that determine the cost of a regular insurance policy.

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