Pay-Per-Mile Insurance Only Makes Sense For Certain Types of Drivers
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- Save money as an infrequent driver
- Car insurance costs during the pandemic
- Find affordable coverage that works for you
From time to time, it can be a good idea to reevaluate your car insurance options to see what works best for you. If you’re an infrequent driver, pay-per-mile insurance might be a policy that better suits your needs.
This type of insurance lets you pay based on the number of miles you drive. According to MoneyWise, this insurance option increased in popularity in 2020, since there were fewer people driving during the height of the COVID-19 pandemic.
It sounds good, but how can you be sure this type of insurance really makes sense for you? Is it just a trend of the pandemic, or is accounting for infrequent driving part of the future for car insurance?
Save money as an infrequent driver
Simply put, pay-per-mile means you drive less and save more. If you are a remote worker, it may be worth looking into this type of car insurance.
But another factor to consider is your driving habits when you do drive. Since pay-per-mile car insurance costs are based on driving habits, your rate could increase if your driving habits aren’t good.
There are different ways car insurance companies can monitor your driving, although telematics devices are commonly used to track your speed and mileage. Car insurance companies use this data to adjust your insurance rates.
For the most part, pay-per-mile insurance has a base rate that stays the same each month coupled with the individual per-mile cost.
It’s worth considering if you’re still working remotely and plan to do so for a while, and have a clean driving record.
Car insurance costs during the pandemic
In 2020, there were fewer drivers on the road since many offices went remote. Pay-per-mile insurance makes a lot of sense in this case.
In fact, the pandemic has reportedly caused an increase in pay-per-mile car insurance programs that allow drivers to only pay for the miles they drive each month rather than a flat fee.
Bloomberg reported that during the pandemic, Allstate saw a large increase in the number of cars insured through its Milewise program. In fact, the number was about six times higher in 2020 compared to 2019. The program, which is only available in certain states, tracks the customer’s driving with a plug-in device.
It was reportedly mostly new drivers who were interested in Allstate’s pay-per-mile insurance program, although some existing customers switched to the program as they cut back on driving.
Another company offering this type of insurance is Nationwide, which offers its SmartMiles programs in 41 states.
Find affordable coverage that works for you
Jerry can help you find the right type of coverage at the right price, whether or not you decide that pay-per-mile car insurance is for you.