What is pay-per-mile insurance, and what does it cover?


You can save on your car insurance rates with pay-per-mile insurance. Pay-per-mile is not available from every major insurance company yet, but its popularity is on the rise. Pay-per-mile insurance is not a usage-based discount but an innovative form of car insurance that can provide excellent coverage while saving you money.

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UPDATED: 2021-10-15T20:27:48.210Z
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What You Should Know

  • Pay-per-mile is not a usage-based discount program, but it is an innovative form of car insurance coverage
  • While not every major insurance company offers pay-per-mile, there are small companies dedicated to this type of insurance
  • Pay-per-mile insurance clients are charged on a monthly or even daily basis

Drivers looking for the best low mileage car insurance will be excited to learn about pay-per-mile insurance.

With pay-per-mile insurance, affordable car insurance is more attainable than you may think.

When you buy pay-per-mile car insurance, you only pay based upon how much you drive on a daily or monthly basis, in addition to a per-mile fee of about 2-10 cents.

Now, bear in mind that pay-per-mile insurance is not a usage-based insurance program. A usage-based insurance program tracks how you drive to give you a discount.

Pay-per-mile insurance provides you with all the coverage you would receive from a standard policy but provides you with innovative ways to pay for it.

Obtaining car insurance quotes for pay-per-mile insurance is incredibly easy. You can compare quotes from your smartphone while you're on the go or curl up on the couch and use your tablet to request free online quotes.

Are you ready to learn how you can save money on your car insurance? You can start comparing car insurance rates for pay-per-mile insurance today. Enter your ZIP code to receive free quotes for pay-per-mile insurance.

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Table of Contents

How does pay-per-mile insurance work?

Pay-per-mile insurance is an innovative form of insurance that operates in a straightforward fashion. A car insurance company that offers this type of coverage bills pay-per-mile insurance clients monthly or even daily.

Now, you may be wondering how insurers can track your mileage. Your insurance company will use a device that plugs into a port located underneath your dashboard. This device will track how far you drive every day.

Even if you have an older car from 1999, you should utilize this plug-in device; however, be aware that not all electric vehicles and hybrids will be compatible with this plug-in device.

Many pay-per-mile companies will have a mileage cap in place for their clients as well.

That means that if your mileage cap is set at 150 for the day, but you drive 200 miles in one day, you will only be charged for the initial 150 miles that you drove.

But you won’t have to worry about wrapping your head around complex equations to figure out what you’ll be paying your insurance company.

Your insurance company will have a base rate for your coverage, plus a small fee for each mile you drive. Standard formulas help insurance companies calculate these rates and per-mile fees.

How are pay-per-mile insurance fees calculated?

When calculating base rates and per-mile fees, insurance companies use industry-standard formulas to find your rates.

Now when you shop for a car insurance company with pay-per-mile insurance online, you’ll need to plug your information into these formulas. But what does an insurance company need from you to calculate your rates?

Quite a bit, actually. When determining your risk level, an insurance company needs to get to know you as a driver before giving you your rate.

Here you’ll see what some pay-per-mile insurance companies will need to find your individualized rate:

  • Your driving record
  • Your claims history
  • Your age
  • Your gender
  • Your education level
  • Your car’s make and model
  • Your occupation
  • Your location

Where can you buy pay-per-mile insurance?

Pay-per-mile insurance is still a new product in the insurance market, so it is only available with a few companies presently. Still, pay-per-mile insurance’s popularity is on the rise.

You can find major insurance companies that offer pay-per-mile policies alongside standard policies. Still, some companies champion pay-per-mile insurance as their only products.

When you shop for car insurance online, you'll be able to compare quotes from large and small companies side by side.

Which are the best pay-per-mile insurance companies?

The best pay-per-mile insurance company for you will, of course, depend upon your budget and also upon where you live.

Since pay-per-mile insurance isn't available everywhere yet, where you live may not have a lot of pay-per-mile insurance companies public.

For example, if you live in South Carolina, you can only work with Nationwide to get pay-per-mile insurance, and drivers in Arizona have a much more comprehensive selection of companies they can work with.

Not sure which insurance companies are available in your state? Take a look at these companies that offer pay-per-mile insurance to see if they can help you get pay-per-mile insurance:

  • Liberty Mutual ByMile
  • Allstate Milewise
  • Mile Auto
  • Metromile
  • Nationwide

Suppose you have a few companies to choose from but don’t know which insurance company is the best fit for you. In that case, you can always use free resources like insurance agent ratings or insurance company reviews.

These tools will give you all the information you need to make the best choice.

Pay-Per-Mile Insurance: What You need to Know

If you’re interested in pay-per-mile insurance, buy car insurance from a company that fits your needs the best.

You can find out which company is the right choice for you by requesting at least three quotes from different companies when shopping online for car insurance.

This simple step will let you compare coverage and rates all from the comfort of your home.

Are you excited to see how much you could save with pay-per-mile insurance? Start comparing rates today. Enter your ZIP code to get free pay-per-mile insurance quotes right away.

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