Now Is the Right Time To Try Pay-per-Mile Car Insurance
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- How does pay-per-mile car insurance work?
- What to consider before trying pay-per-mile insurance
- Is Milewise by Allstate worth it?
- Is SmartMiles by Nationwide a good choice?
Let’s face it—2020 changed the way we all live, work, and travel. So, consider this hypothetical: You aren’t driving as much as you used to, but you’re still paying that high monthly car insurance premium, regardless of the fact you aren’t using your car as much.
Well, say hello to pay-per-mile insurance. Though it might sound unconventional, this type of coverage is increasingly becoming a popular way for drivers to save money on their auto insurance.
Interested in finding a new policy? Jerry is here to help; find the coverage and provider that works best for your lifestyle.
How does pay-per-mile car insurance work?
The growing popularity of working-from-home and virtual communication has allowed for a new level of autonomy and convenience for people in all types of fields. The auto insurance industry has taken note and is finding ways to keep up with different policy types.
Pay-per-mile-car insurance works exactly how it sounds: you’re only paying for the miles that you put on your vehicle—and hopefully saving money in the process.
A pay-per-mile policy will have a base monthly rate that averages around $20/mo according to Yahoo!. The coverage will allot a mileage cap that estimates the amount you will be driving each month. If you drive over that given amount, then you’ll pay additionally for each mile driven. Here’s an example:
- You have a pay-per-mile car insurance policy with a premium of $20/mo
- Let’s say your monthly mileage cap for your policy is 150-300 miles
- For each mile driven, you are charged $.25
So, if you drove 300 miles in a given month, then you’ll end up paying an additional $12.50. According to the Insurance Information Institute (III), the average driver in the U.S. pays around $1,100 annually to insure their car. Even though individual rates can vary widely, those who drive infrequently might expect substantial savings when switching to a pay-per-mile coverage policy.
What to consider before trying pay-per-mile insurance
If you drive a lot (more than 12,000 miles/yr), then paying-per-mile probably isn’t worth the switch. But if you’ve found yourself consistently working from home, or having supplies and groceries delivered instead of making the trip yourself, then it could be well worth considering.
But, if you use your personal vehicle for work, or plan on taking extended road trips, then those extra miles could be costly with a pay-per-mile policy. Ultimately, you have to be honest with yourself about how much you typically drive.
Is Milewise by Allstate worth it?
Allstate’s Milewise program offers pay-per-mile coverage in 20 U.S. states and uses an electronic device to track your braking, acceleration, and other driving habits.
Milewise uses a daily rate, plus a per-mile rate to calculate your monthly premium. Allstate offers to review your premium every six months based on recorded driver data.
Is SmartMiles by Nationwide a good choice?
Similar to Allstate’s policy, Nationwide has a SmartMiles option that uses a device to calculate your mileage, and they offer a competitively priced “Safe Driving Behavior” discount. Their tracker is compatible with most vehicles manufactured after 1996, though some diesel and EV-powered cars may not be eligible for their tracking device. Smartmiles is available in 41 US states.
While 2020 has brought with it a lot of changes and instability, the best way to stay ahead of the curve is to think dynamically about your spending habits. If pay-per-mile car insurance sounds like something that could benefit you or your household, let Jerry help you navigate your options to find what works best for you.