Pay-Per-Mile Insurance Coverage

With pay-per-mile insurance, telematics are used to track your mileage. Then your rates are determined by your mileage plus a small daily charge. Stay-at-home parents and people that live near public transit who don’t drive a lot can benefit from pay-per-mile car insurance. To find out if usage-based insurance is a good choice for you, compare online quotes from top-ranked companies.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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Overview

  • Auto insurance companies use telematics to determine how many miles you drive
  • Pay-per-mile insurance is a combination of a small daily charge and a rate based on how many miles you drive
  • Most major auto insurance companies offer usage-based insurance

Pay-per-mile insurance is a great choice for some drivers. You control how much you pay each month by how much you drive.

Be sure to shop around and compare quotes to find affordable pay-per-mile auto insurance. Each auto insurance company will have its own program so you will want to look carefully at what multiple companies can offer you.

Enter your ZIP code now to compare pay-per-mile auto insurance rates from top companies in your area.

What is pay-per-mile auto insurance?

Insurance pay-per-mile is exactly as it sounds. You’re basically paying for every mile you drive.

First, you are charged a small base rate each month. This rate is calculated from the usual factors that affect the price of car insurance, such as age, driving record, and ZIP code.

Second, you are charged at a low rate for each mile you drive. You pay the combined charge for the base rate and the mileage.

You are in control of your rates. Usage-based insurance can be much cheaper than standard auto insurance if you drive very little.

Although they sound similar, pay-per-mile insurance should not be confused with pay-as-you-drive insurance.

The major difference is that with pay-as-you-drive insurance, your rates are based on your safe driving habits. Hard braking, speeding, distracted driving, and the time of day you drive are all used to calculate your rates or discounts.

If you drive poorly, your rates can increase with some companies.

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Who should use pay-per-mile auto insurance?

For drivers who don’t put much mileage on their cars, pay-per-mile insurance is a great choice.

Great candidates for use-based insurance are stay-at-home parents, people who work from home, and people who live near public transit.

However, this form of insurance may not be the best fit for you if you drive to work every day or drive around for fun.

Also, pay-per-mile insurance might not work for you if you have a tight budget, because the charge for each month would be different.

How does pay-per-mile auto insurance work?

Some companies, like Metromile, are dedicated to pay-per-mile insurance, while other companies offer it along with standard policies.

Nine out of ten of the major auto insurance firms offer some kind of use-based insurance, according to the Insurance Information Institute. This makes finding a program relatively easy, but keep in mind that each one is different.

For example, pay-per-mile insurance auto insurance companies have different methods of tracking your mileage.

Most auto insurance companies use some sort of telematics device to count miles. This is usually a plug-in device but can also be a tab that mounts on your windshield. An app is used with these devices to report your mileage.

For example, Milewise is Allstate’s pay-per-mile program. It records your mileage using a plug-in device, and then adds that to your daily rate.

Also, with pay-per-mile insurance, you can still receive the basic types of auto insurance coverage as with a normal policy, your cost is just different.

Another thing to be aware of is that pay-per-mile programs like Milewise aren’t available everywhere. You will need to check to see if usage-based insurance is offered in your state.

Before you buy pay-per-mile auto insurance, shop around to see if it’s the best option. Compare quotes with standard auto insurance rates to see what is the cheaper insurance option for you.

Enter your ZIP code now to compare pay-per-mile auto insurance quotes and find the best deal for you.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

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