Between car payments, gas money and insurance, Americans are spending thousands of dollars to drive their vehicles each year. The price of insurance alone can cost a hefty amount. In fact, the average person can spend anywhere from $1,100 to $2,040¹ annually on their premium. This is a lot of money to pay for insurance, and it’s not always worth it depending on how often you drive. That’s why you should consider looking into pay per mile insurance.
This gives drivers the opportunity to save money simply by paying an insurance premium relative to how much they drive. Aside from saving money, there are more benefits to switching insurance payments.
89stocker / ShutterstockWhat Is Pay Per Mile Insurance?
With normal car insurance, you’re given a flat monthly premium depending on where you live, your driving history, the type of car you drive and more. Paying by the mile for insurance is different. Instead, you pay for what you drive.
Insurance companies track how many miles you drive each month and charge you a per mile fee in addition to a base rate. The base rate is similarly decided to normal insurance and will depend on your driving history, age, gender and vehicle type. The less you drive, the less insurance you have to pay.
There are three potential billing options² you might get with mileage-based insurance.
- Prepaid Mileage: A prepaid set of miles which the policyholder must replenish or be given a rebate
- Post-paid Recurring Billing: A regular billing period the policyholder must pay for their driven mileage
- Post-paid Ad-hoc Billing: Policyholder is invoiced at undefined intervals in association with vehicle usage
Pay per mile insurance still gives you full comprehensive and collision coverage. Companies will charge you more if you’re on the road more frequently because the likelihood of getting into an accident increases. Your bill will likely differ each month if you drive a different amount of miles.
Benefits Of Pay Per Mile Insurance
This form of insurance is most beneficial for part-time drivers. If you drive infrequently, rely mostly on public transit, or spend a lot of time at home, this type of insurance could be right for you.
Pay per mile insurance exists to save you money. Companies are catering to low mileage drivers who want the option to drive their car whenever they want, but don’t want to pay the same premiums that full-time drivers will.
Your lifestyle will ultimately determine whether or not switching to pay per mile is right for you. You might benefit from pay per mile insurance if you:
- Work from home
- Live and work downtown
- Live on campus as a student
- Own an extra car rarely driven
- Drive only 500 to 1,000 miles per month
Aside from saving money, this form of insurance can even encourage people to drive less and lessen their impact on the environment in the process.
Companies With Pay Per Mile Insurance
Pay per mile insurance plans will charge you a flat rate and a few cents per mile driven. They also have user-friendly apps to track your mileage and easily file claims. Here are four insurance companies that provide pay per mile insurance.
Nationwide
Through the Nationwide SmartMiles program, drivers can pay a monthly insurance rate based on how much they drive. The company offers a 10 percent³ discount for enrolling and you can earn up to a 40 percent discount on your premium upon renewal after proving you’re a safe driver. Plus, Nationwide will exempt 250 miles per day from your usage if you go on a road trip.
Metromile
Rates with Metromile can cost as low as $29 per month⁴ plus a few cents for each driven mile. Their low premiums save customers an average of $741 per year, Potential customers can easily calculate their rate on the Metromile website to learn how much money they can save by switching to a pay per mile plan. The company offers flexible plans that can include roadside assistance and glass repair.
Root
You can save up to 52 percent⁵ on your car insurance simply by switching to mileage-based insurance with Root. You can get started by driving with the Root app downloaded and be given an insurance quote after a few weeks based on your driving patterns. The company also offers free Lyft credits on select holidays and cash offerings for referring friends.
Progressive Snapshot
This company offers many types of insurance plans, and one of them is mileage-based insurance. The Snapshot program⁶ will monitor your driving and personalize your rate based on how much your drive and your driving habits. In addition to driving less, you can save money further by avoiding harsh braking and accelerating, avoiding late night drives and staying off your phone.
Search For Pay Per Mile Insurance Quotes Online
If you’re a low mileage driver who doesn’t want to pay a high insurance premium every month, consider pay per mile coverage. You could end up saving a lot of money simply by paying based on how often you drive.
This is a great option for people who find themselves driving less than average. Whether you’re working from home, mostly rely on public transit, have a second car sitting in the driveway or for other reasons, pay per mile insurance can help you save hundreds of dollars annually.
A number of insurance companies provide this type of coverage. Go onto each of their websites and fill out a short questionnaire to get a free quote. Compare the rates, choose your coverage and start paying less money for insurance.
