Pay-Per-Mile Insurance: A Guide
If you have a car that you don’t drive often, traditional insurance may not be the best car insurance option for you.
Pay-per-mile insurance could save you up to 40% a year on your car insurance if you don’t drive regularly.
That’s why car insurance broker and comparison-shopping app, Jerry has compiled everything you need to know about pay-per-mile insurance.
If you have a unique insurance situation, Jerry can help you save. Just fill out a few questions that take less than 45 seconds to complete and Jerry will present you with competitive quotes at affordable prices.
The average Jerry user saves $879 a year on car insurance.
What is pay-per-mile insurance?
Pay-per-mile insurance lets you pay for car insurance based on the number of miles you drive. Drivers that don’t often drive (pandemic, anyone?) could potentially cut their traditional car insurance prices almost in half.
Pay-per-mile is a usage-based insurance. Usage-based policies use telematics devices to track how much you drive and your driving habits so they can determine a car insurance premium specific to you.
There are two types of usage-based insurance:
Pay-per-mile: determines your insurance costs based on the number of miles you drive.
Pay-as-you-drive (aka, pay-as-you-go): determines your insurance costs based on your driving habits, which means that your policy could potentially go up if you regularly exhibit bad driving habits.
“Never thought finding insurance could be so easy. It was a quick process and I didn’t have to do anything but answer a few questions and they did the rest.” — Satisfied Jerry Customer
How much does pay-per-mile insurance cost?
Generally, pay-per-mile insurance has a base rate that remains consistent from month-to-month coupled with a per-mile cost. The per-mile cost will probably also have a mileage cap somewhere between 150-300 miles per day.
For example, if your policy has a 200 mile limit per month at a rate of five cents per mile, if you drive all 200 miles, you would be charged $10 on top of your base rate.
Just like traditional car insurance quotes, your base rate for a pay-per-mile policy is determined by different factors like age, gender, car make, and model.
How does it work?
Insurance companies use a telematics device to track your mileage and driving habits. Depending on your telematics program, you could be eligible for discounts if you exhibit safe driving behavior.
If you’re not comfortable with a telematics device collecting your data, some companies offer pay-per-mile insurance without a telematics device. Instead, you send a monthly picture of your odometer to your insurance company.
If you think you would benefit from a telematics program, Jerry can connect you to a top insurer that offers per-mile telematics.
Companies that offer pay-per-mile insurance
Here are some of the notable telematics programs offered by top insurance companies.
|Company||Estimated Savings||How it works||States available|
|Allstate (Milewise)||Up to 20% for 10,000 miles||*Uses a plug-in telematics device and mobile app to track driving. *Your rates include a daily base rate + per-mile rate.||AZ, DC, DE, FL, ID, IL, IN, MA, MD, NJ, OH, OR, PA, TX, VA, WA, WV|
|Metromile||$741 a year, on average||*Uses a plug-in telematics device. *You pay a monthly base rate + per-mile rate. * In AZ, IL, OR, and VA, driving behavior is used to set rates when you renew your policy.||AZ, CA, IL, NJ, OR, PA, VA, WA|
|Mile Auto||Up to 30% to 40% over your previous company||*You pay: monthly base rate + per-mile rate. *You send a photo of your odometer once a month, no telematics device.||GA, IL, OR|
|Nationwide (Smartmiles)||Up to 10% for safe driving||*Uses a plug-in telematics device. *Your rate includes a daily base rate + per-mile rate.||AZ, CO, CT, DC, FL, IA, ID, IL, IN, KS, MD, ME, MN, MO, MT, ND, NE, NH, NM, NV, OH, OR, PA, SC, SD, TX, UT, VA, VT, WA, WI, WY|
Is pay-per-mile insurance right for me?
Pay-per-mile might be the best insurance option for you if you drive under 13 thousand miles per year.
Pay-per-mile insurance may be right for you if you…
- Are a student
- Work from home
- Regularly take transit or use alternative modes of transportation
- Have a second vehicle you don’t use often
Pay-per-mile vs. pay-as-you-drive
Both pay-per-mile and pay-as-you-drive insurance are types of usage-based insurance. The most significant difference between the two is that pay-as-you-drive also tracks driving habits.
If you exhibit bad driving habits like—speeding, driving aggressively, hard braking— it could increase your monthly rates because you have a higher probability of getting into an accident.
“Jerry offers an extremely easy and swift process to getting you the cheapest insurance. I was paying a ton of money per month on car insurance, then I discovered Jerry and I’m now saving over $150 per month.” — Satisfied Jerry Customer
Who offers pay-as-you-drive insurance?
|Company||Offered discounts||How it works||States available|
|Geico (DriveEasy)||Up to 25% for signing up||*Uses app to track driving behavior and creates customized rate *Rates increase with risky driving habits||CT, IL, OR, PA, WI|
|Progressive (Snapshot)||$145 per year, on average||*Uses a plug-in telematics device or mobile app to record driving habits and customize rates accordingly *Rates increase with risky driving habits||Available in 48 states + Washington, D.C.; not offered in CA and NC. Sign-up discount is not available in AK, HI, and NY.|
|Root Insurance||Up to $900 a year||*Root app tracks your driving for about three weeks *After test-drive period, you’ll get a quote *Will only insure good drivers||AR, AZ, CA, CO, CT, DE, GA, IL, IN, IA, KY, LA, MD, MS, MO, MT, ND, NE, NM, NV, OH, OK, OR, PA, SC, TN, TX, UT, VA, WV|
|Travelers (Intellidrive)||Up to 20%||*Mobile app tracks your driving for 90 days *Discounts aren’t guaranteed, and drivers could see an increase in rates||AR, AZ, AL, CO, CT, DC, FL, GA, IA, ID, IL, IN, KS, KY, MA, MD, ME, MN, MO, MS, MT, NE, NH, NJ, NM, NV, OK, OH, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI|
There are two types of ways companies use telematics: with a device or through your phone.
Physical trackers work by being plugged into the OBD-II port of your car. All cars produced after 1996 have this port. So, as long as your vehicle was built after 1996, you’re all set!
Regardless of if you use the app or physical tracker, both methods will collect data on your driving habits and distance so your insurance company can calculate how much you have to pay at the end of each month.
When is pay-per-mile insurance worth it?
If you drive under 12 thousand miles a year, opting for a pay-per-mile insurance plan may benefit you.
Can I get car insurance discounts with pay-per-mile auto insurance?
Depending on the company, your telematics device could also track your driving behavior, which could potentially earn you a discount. Specific discounts vary based on company and state.
If you want cheap car insurance quotes fast, download Jerry. A licensed broker that offers end-to-end support.
Jerry gathers affordable quotes, helps switch plans or providers, and even cancels your old policy.
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Haven’t shopped for insurance in the last six months? There might be hundreds $$$ in savings waiting for you.
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Saved $725 annually
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