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If you own a car but rarely drive it, you may want to consider a less expensive car insurance option than traditional coverage. Per-mile insurance saves you money (up to 40% or more, according to some carriers), but only if you don’t drive it often.
Pay-per-mile Car Insurance: Is It Right For You?
Per-mile car insurance allows you to pay for coverage based on the number of miles you drive. As a result, it is generally better suited to people who drive infrequently.
What Is Pay Per Mile Car Insurance?
Mileage insurance premiums are different from the low mileage discounts offered by some car insurers. Low mileage discounts offer a percentage off the cost of a traditional plan, while pay-per-mile car insurance determines your price based on the distance you drive.
According to the U.S. Department of Transportation’s Federal Highway Administration, Americans drive an average of 13,500 miles per year. But knowing how long you need to drive to take advantage of pay-per-mile car insurance can be tricky.
Mile Auto states on its website that if you drive fewer than 10,000 miles per year, you’re paying too much for traditional car insurance. However, if they drive fewer than 8,000 miles per year, they can benefit from the SmartMiles premium insurance program, National said.
Miles-paying customers pay a monthly base fee, which remains the same, and a monthly mileage rate, which is subject to change. If your mileage changes from month to month, your monthly mileage will change as well.
What Is Pay Per Mile Auto Insurance?
The carrier generally uses the same factors as traditional car insurance rates, such as gender, age, car make and model, to determine the base monthly rate.
Although per-mile car insurance is different from traditional car insurance, you still get the same coverage options, such as comprehensive insurance and accident insurance.
Insurance companies use technology known as “telematics” to track how you drive using an app or other device. Telematics can track dangerous behaviors – thinking too hard or too fast. Some mileage programs, such as National SmartMiles and MetroMiles, use the drive feature for rewards or discounts. The safer you drive, the lower your rates can be. Note: Lemonade officially acquired Metromile in 2022, but still offers pay-per-mile insurance.
If you’re not comfortable sharing your data, Mile Auto allows you to purchase pay-per-mile insurance without using a blocking device that tracks your driving habits. Instead, you should send the photographer a photo of your odometer once a month.
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Prices for mileage insurance vary depending on the insurer and the number of kilometers you drive. And just like traditional car insurance policies, driving history and personal characteristics are used to determine the monthly starting price.
Don’t immediately buy into the savings the company claims you’ll get – you need to do the math after you get a quote to find out how much you can save on your current carrier.
Use this formula to calculate how much you’ll pay for premium insurance: monthly base rate + (cost per mile x estimated number of miles driven per month).
For example, let’s say your mileage rate shows a monthly rate of $34 and a rate of 5 cents per mile. In total, you travel 800 miles per month.
How Much Does Uk Car Insurance Cost?
Again, this is just an estimate and your actual monthly payment will vary depending on the number of miles driven.
Not sure how many miles to drive? Track your mileage before trying the pay-per-mile plan. This will give you a better estimate of what your insurance premium per mile will be.
If you don’t want to track your mileage yourself, one option is the Ride With Metromile program. Metromile tracks your driving through the app for two weeks and gives you a bill based on your driving. If you use the Ride Together feature, you have no obligation to upgrade to Metromile.
Only a few insurers offer pay-per-mile insurance options. Some companies, like Metromile, specialize in this type of insurance, while a few large insurers, like Allstate, offer a per-mile option.
What To Know About Pay Per Mile Car Insurance
Location: AZ, DC, DE, FL, ID, IL, IN, MA, MD, NJ, OH, OK, OR, PA, TX, VA, WA, WI, WV.
How it works: It focuses on pay-per-mile auto insurance. Your car’s immobilizer tracks your driving. The drive feature is used to set premiums when you renew your policy in certain states, including AZ, IL, OR and VA.
How it works: It focuses on pay-per-mile auto insurance. You need to send a photo of your odometer once a month to track your mileage.
When available: All states except Alaska, California, Delaware, Hawaii, Louisiana, Massachusetts, New Jersey, New York, North Carolina and Oklahoma.
Low Mileage Car Insurance: What Is It?
It depends on how often you drive. If you continue to log low miles, pay-per-mile insurance may be less expensive than traditional car insurance policies. But if you’re only considering it because you know you’ll be driving less for a while, the traditional system is still the best option.
Carriers verify your trip in several ways. Your insurer can track your mileage through a device on your car’s dashboard or an app on your phone. Some companies may regularly ask you to take a photo of your odometer.
The best insurance company for you depends on where you live and your insurance needs. Although Metromile and Mile Auto specialize in premium auto insurance, their programs are not as extensive as Allstate Milewise and National SmartMiles. Anyone looking to combine their insurance will also need to consider any state or national coverages.
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Pay Per Mile Car Insurance: A Smarter And Fairer Way To Insure Your Vehicle
Kaida Norman is a car insurance agency. The Walt Disney Co. offers in communications and has worked as a web developer and editor for various health and wellness publications, including Health Magazine. His work has been featured in The New York Times, The Washington Post and USA Today. Learn more
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Many people now drive because disease restrictions have been eased. However, many drivers have changed their driving habits to below pre-infected levels. As a result, per-mile car insurance has become very popular with drivers who want to pay only for what they need.
Pay-per-mile car insurance is based on the number of miles your car drives each month. Monthly rates fluctuate and vary depending on how many miles you actually drive. Unless you pay lower premiums and more money for every mile you drive, the insurer offers regular coverage options like traditional policies. This type of car insurance is best suited to people who drive little.
As more cars and insurers use “telematics,” technology that monitors vehicles via GPS, insurers can offer personalized coverage based on drivers’ unique needs. Large insurers widely use telematics. Telematics can track individual driver behavior while driving.
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Communication devices can be built into cars like Tesla’s or require you to connect a device to your car’s dashboard. Some insurers require drivers to connect mobile apps to devices.
A cost per mile policy typically consists of two parts: a base rate and a premium (cost per mile) rate. Rates are based on factors such as gender, age, location and driving history. The average mileage rate is based on actual miles. Unlike a universal plan where the monthly premium remains the same, the monthly rate of a pay-per-kilometer plan varies from one month to the next.
Car insurance rates can vary depending on the insurer and the driver. If you drive low mileage, payments can be 30-50% cheaper per mile. Here is an example for a 35 year old single
