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Mileage Insurance
What is pay-per-mile insurance?
Pay-per-mile car insurance is coverage based on how many miles you drive. The more you drive, the more you have to pay for your auto insurance and vice versa.
Why does annual mileage matter?
Car insurance premiums are based on risk. The more you drive, the chances of you getting involved in an accident and making a claim are higher. So, the higher your annual mileage, the higher your premium is likely to cost.
Supplemental Liability Insurance
How does pay-per-mile insurance work?
For pay-per-mile programs, insurance companies have to have an accurate way to measure your miles. Most insurance providers use a small device named Metromile that plugs into a port near the steering wheel (called the OBD-II).
For such insurance, a vehicle that was made in 1996 or newer is required for the device to work but still depends on the insurer.
The Metromile device tracks your location as well as your mileage, but the location service will be disabled for privacy. However, you can keep it on and use Metromile’s app to track and plan your trips and locate your car if it’s stolen.
If you don’t like installing a device in your car to track your mileage and location, you can choose Mile Auto. Mile Auto requires you to take a photo of your odometers once a month to report your mileage.
Cost of Pay-Per-Mile Insurance
Rates for pay-per-mile insurance vary from company to company as well as person to person. Also, which state you live in impacts your rates.
You may understand better through an example:
Suppose you live in California, and you pay a rate of $29 monthly, which means 5 cents per mile.
If your mileage shows you have driven 500 miles in a month, you have to pay a total of $54 for that month. So, based on the formula:
Monthly base rate + (Per-mile rate x Approximate number of miles you drive per month)
$29 base rate + (500 miles x $0.05) = $54
What does pay-per-mile include?
Pay-Per-Mile includes:
1. Liability:
Liability covers other people’s vehicle repairs and medical bills after accidents that you were at fault. The costs of repairing any property damaged and the medical bills resulting from an accident are covered. Almost all states require a minimum amount of liability insurance.
2. Collision:
Collision coverage will cover damages done to your own vehicle if you’re involved in an accident with another car object, or you get into a single-car accident. If your car is totaled (totaled means the cost of repairs exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car.
3. Comprehensive:
This insurance will cover the expenses of damages to your own vehicle that is caused by something other than an accident, like vandalism or a natural disaster.
4. Uninsured/ Underinsured Motorist:
This specific insurance will pay the medical bills and vehicle repairs if you’re in an accident caused by an uninsured motorist or a driver who doesn’t have enough liability insurance to cover your expenses.
5. Emergency Roadside Assistant
If you get a flat tire, run out of gas, a tow or jump start, or lock yourself out of your car. Tow services are to a nearby garage of your choice, up to a specified distance mentioned in your policy.
Progressive Roadside Reimbursement
Who would benefit from mileage insurance?
Clearly, someone who doesn’t drive much might save money by switching to pay-per-mile insurance, but how much less? Less than what?
According to the Federal Highway Administration, Americans drive 13,476 miles a year, so if you want to switch and save, you must drive less than that.
Don’t mistake factors here. The length of time spends time sitting in your car, for example, behind traffic, is not as same as your distance.
What is the difference between low-mileage discounts and mileage insurance?
Pay-per-mile insurance is different from a low-mileage discount. Mileage insurance is the percentage off of your traditional policy, while low-mileage car insurance determines your rate based on how far you drive.
What’s the difference between usage-based insurance and mileage insurance?
Pay-per-mile insurance is also different from usage-based auto insurance. Usage-based emphasis on safe driving behaviors, but mileage insurance is based on your actual miles driven.
