[{"@context":"https:\/\/schema.org\/","@type":"Article","@id":"https:\/\/moneydoneright.com\/personal-finance\/saving-and-budgeting\/is-pay-per-mile-insurance-worth-it\/#Article","mainEntityOfPage":"https:\/\/moneydoneright.com\/personal-finance\/saving-and-budgeting\/is-pay-per-mile-insurance-worth-it\/","headline":"Can Pay Per Mile Insurance Save You Money?","name":"Can Pay Per Mile Insurance Save You Money?","description":"Automobile insurance can end up being quite costly.\u00a0The average annual car insurance cost in...","datePublished":"2019-01-31","dateModified":"2023-04-16","author":{"@type":"Person","@id":"https:\/\/moneydoneright.com\/author\/logan-allec\/#Person","name":"Logan Allec, CPA","url":"https:\/\/moneydoneright.com\/author\/logan-allec\/","identifier":4,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Money Done Right","logo":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","width":488,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/2019\/01\/pay-per-mile-insurance.jpg","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/2019\/01\/pay-per-mile-insurance.jpg","height":760,"width":1000},"url":"https:\/\/moneydoneright.com\/personal-finance\/saving-and-budgeting\/is-pay-per-mile-insurance-worth-it\/","about":["Saving Money"],"wordCount":2348,"articleBody":"Automobile insurance can end up being quite costly.\u00a0The average annual car insurance cost in America is slightly over 1,300 dollars, a Quadrant Information Services study for 2018 suggests.While there are factors affecting the cost of car insurance (age, driving experience, gender, etc.), the sum will still be pretty significant in the context of your other yearly expenditure.\u00a0Needless to say, you may be looking for ways to reduce the cost of automobile insurance.When doing so, you could have come across pay per mile insurance options.\u00a0As the name suggests, these insurances utilize a model that\u2019s different from the one used to calculate standard quotes.Pay per mile could be the answer for certain types of drivers.\u00a0Obviously, it\u2019s not the most budget-friendly option for everyone, especially for those who have to deal with a lengthy daily commute.If you don\u2019t have to overcome such a hurdle, pay per mile auto insurance could be an option worth exploring.What is Pay Per Mile Insurance?The pay per mile insurance works by adjusting your insurance rate on the basis of the number of miles you\u2019ve driven each month.\u00a0Those who drive fewer miles than the average driver will benefit from significantly reduced insurance rates.While in the past pay per mile car insurance used to be quite rare, today, several companies have enabled such possibilities for their customers.\u00a0Metromile is one of these insurance companies.The company\u2019s pay per mile insurance is based on how much you drive and the cost is just pennies per mile.Good to Know:\u00a0According to some estimates, pay per mile auto insurance is most profitable for those who drive 500 miles per month or less.\u00a0Thus, if you need to cover a long distance to work or to university every single day, you\u2019re not the best candidate for the opportunity.\u00a0Those, however, who rely on public transport most of the time but still own a car can produce significant car insurance savings by making a switch to the mileage-based model.Things to Consider Before Making the SwitchYour car usage is obviously the most important thing to consider before making the switch to pay per mile insurance.\u00a0The national US average for automobile driving is 13,476 miles per year. If you fall beneath this baseline number, pay per mile auto insurance could help you save money.This, however, is only true for some programs.\u00a0The most important thing to examine is the base rate and the cost per mile.\u00a0In the case of Metromile insurances, the base rate starts at 29 dollars. You\u2019ll need to submit your own details and the information of your vehicle to get a personalized cost per mile.An Important PerkThe company offers a nice added perk \u2013 if you go on a long trip, you will benefit from free miles when you cross the 250-mile mark for the day.\u00a0Thus, Metromile insurance is a good choice even for those who do some driving.\u00a0In other instances, however, the cost per mile could be higher.\u00a0If this is the case, you will need to do significantly less driving to get an affordable quote.Always get offers from several companies and compare those side by side.\u00a0There could be significant differences.\u00a0Don\u2019t underestimate your driving habits when considering the switch to pay per mile auto insurance.\u00a0In the case of some programs, driving habits could also affect expenditure.Breaking hard, driving in the middle of the night and other similar occurrences have been claimed to increase the cost of pay per mile insurance in some instances.\u00a0Check what your insurance company will be tracking and how.\u00a0Apart from the rate, this is the second essential element that will determine how much pay per mile insurance is going to cost you.Pro Tip: If you\u2019re not that confident in what your driving habits are, you may want to opt for a tool like Root in order to gain some clarity.\u00a0Root is an app that you can download to assess your driving behavior, pinpoint problems and produce savings by resolving those.How Exactly Does It Work?If you\u2019re already interested in the concept of pay per mile insurance, you may be wondering about how it works.\u00a0How do the companies track your mileage?\u00a0Is this tracking accurate?\u00a0Is it possible to get overcharged because the manner in which the calculation is done was not carried out in the best way?As pay per mile car insurance is still a relatively new phenomenon, such questions happen to be quite common.\u00a0Metromile has come forward to offer an explanation.\u00a0In their case, a device known as the Metromile Pulse is being used.\u00a0The Metromile Pulse is a small device that\u2019s plugged under the dashboard to accurately track and log your monthly miles.How Are Monthly Rates Calculated?Monthly rates are calculated on the basis of the information that the insurance company gets from the tracker inside the car.\u00a0In the first month of coverage, the driver will be charged the respective base rate listed in the quote.In the end of the first month, the next month\u2019s base rate will be calculated, as well as the overall mile cost for the previous month.\u00a0Thus, your pay per mile auto insurance is flexible.\u00a0It will vary from month to month and you\u2019ll actually be charged on the miles you\u2019ve driven rather than an average.Some Common Questions about Pay Per Mile InsuranceBefore making up your mind about pay per mile car insurance, you probably have some other questions that need to be addressed.We\u2019ve tried to summarize some of the most frequent inquiries.What is the Type of Coverage?Do pay per mile insurance companies offer full coverage? If not, what is it exactly that they make available to customers?\u00a0Companies like Metromile offer a range of packages and coverage opportunities.\u00a0There are four levels of liability protection, plus various choices for collision or comprehensive deductibles.Some of the services the company has made available with its insurance plans include collision coverage, bodily injury, property damage, medical payment coverage, 24\/7 roadside assistance, rental reimbursements and under\/uninsured motorist coverage.Is It Possible to Add Multiple Vehicles to the Policy?You will need to check with the respective company that you\u2019re interested in getting insurance from.\u00a0In the case of Metromile, drivers can have multiple cars on the same policy.The company offers a multi-car discount that makes the pay per mile insurance even more affordable.\u00a0The discount will apply to both the base rate and the per mile charge for every individual vehicle added to the same policy.\u00a0Thus, if you have several family cars and you want to save even more money on auto insurance, this possibility will definitely be one worth exploring.Is Pay Per Mile Insurance Still Affordable if Driving Habits Change Significantly for a Month?We all know that even if you don\u2019t use your car all that much, there will be months in which your typical mileage is going to change.\u00a0Say you go on vacation and you don\u2019t drive at all a certain month.\u00a0In such instances, only the base rate will apply to the month and it will be the one you\u2019ll have to cover when you get back home.\u00a0On the other hand, you may have to take a long trip because of family or professional issues the next month.Pro Tip: As already mentioned, Metromile caps the daily miles being tracked and charged at 250. Even if you take a lengthy trip out of state, you will not have to pay for more than the initial 250 miles of the journey.\u00a0Those looking at other pay per mile insurance service providers will need to double check and figure out what the billing conditions will be for months with out of the ordinary mileage.Do Standard Insurance Cost Factors Still Apply?The short answer here is \u201cyes.\u201d\u00a0When you get your pay per mile insurance quote, you will have to fill out a questionnaire.\u00a0 Some of the questions will focus on your age, occupation, driving record, type of vehicle being used.Factors like your gender, the age of the automobile, your age, credit history and the length of prior insurance will affect your base rate and the cost per mile.\u00a0For certain drivers, this type insurance is going to be much more affordable than for others who are considered to be a higher risk for the company.How Do You Start a Claim?The process of starting a claim if you have pay per mile auto insurance isn\u2019t that different or unusual.\u00a0Usually, there\u2019ll be an online option for starting a claim.Depending on the accident and the type of coverage, roadside assistance may be requested from the insurance provider.\u00a0The insurance company is once again responsible for identifying the right repair facility for handling the problem.Some aspects of the process are standard \u2013 you will still have to collect evidence, get an appraisal and submit the necessary documentation.\u00a0Metromile makes it possible to start a claim on your phone and to track the entire process from a mobile device for added convenience.A Metromile Overview: Is This the Best Pay Per Mile Car Insurance in the US?Metromile has a big number of loyal customers who are happy with the terms and conditions offered by the company.\u00a0Before joining the ranks of the Metromile clients, however, you\u2019ll have to make sure that the pay per mile insurance is the right one for you.If you like a tech-savvy solution and you drive less than the national average, you will benefit from the company\u2019s pay per mile solution and you will get to save some money along the way.\u00a0One thing you have to keep in mind, however, is that certain types of coverage are mandatory in certain states.\u00a0Thus, apart from the base rate and the cost per mile, you may also have to pay for the additional types of coverage that are mandated by law.Personal injury protection, for example, is mandatory in the state of Oregon.\u00a0It\u2019s best to check local regulations and requirements before you consider the switch to a brand new coverage type like pay per mile car insurance.Where Can You Get Metromile Insurance?Unfortunately, Metromile coverage is currently not available in all parts of the US.\u00a0At the time being, pay per mile coverage is being offered to clients in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington.Check the company\u2019s website every now and then to find out if pay per mile coverage has become available in your state.\u00a0Keep in mind that the pay per mile terms and conditions could vary depending on your location.\u00a0According to Metromile\u2019s presentation, for example, the daily cap of 250 miles is applicable to all states apart from New Jersey. There, the limit is luckily lower and currently set at 150 miles per day.The Biggest Advantages of MetromileAnyone who\u2019s an occasional driver and who would like to save some on auto insurance will benefit from pay per mile quotes.\u00a0Metromile does offer an excellent product for these drivers.Here\u2019s a brief list of the biggest advantages of opting for Metromile pay per mile car insurance.There is no penalty if you occasionally have to drive more than 250 miles in the same day.The pay per mile rates are pretty good in comparison to what some of the company\u2019s competitors have to offer.\u00a0To track miles, Metromile provides a small device that\u2019s simply plugged inside the car.This device can also be used to learn a bit more about your driving habits and the ways to reduce commute expenditure.Good to Know:\u00a0Apart from the pay per mile insurance, you can also get comprehensive coverage, as well as a number of add-ons.\u00a0Roadside assistance is also available.A Few Metromile ShortcomingsThe biggest disadvantage is the fact that Metromile isn\u2019t currently available across the US.\u00a0Most states aren\u2019t being served and if you\u2019re located in one of them, you\u2019ll either have to opt for an alternative or you\u2019ll have to wait for the Metromile offer to become available.If you are a person who drives a lot every single month, you\u2019re also not going to benefit from pay per mile coverage.\u00a0Certain groups of drivers may also have to spend quite a lot on their pay per mile coverage.Quote requests for young and inexperienced drivers have sometimes produced pretty steep base rates and charges per mile.\u00a0Still, the Metromile opportunity is worth pursuing even if you are traditionally considered to be a high-risk driver.\u00a0The manner in which the pay per mile quote is calculated could give you a saving over standard car insurances.Final Verdict: Should You Pursue Pay Per Mile Insurance to Save Money?The car insurance sum you\u2019re spending right now isn\u2019t necessarily the most affordable option for you.\u00a0This market is very dynamic and new products become available all the time.\u00a0Some of these new products may be worth pursuing.\u00a0Pay per mile insurance is a good choice for those who have a car but who don\u2019t drive a lot every single month.Good to Know: The right kind of pay per mile insurance could contribute to serious monthly and annual savings.\u00a0The best aspect of this model is that you\u2019re getting charged for your car usage, not for the ownership of the vehicle itself.\u00a0To determine whether pay per mile auto insurance is a good choice, you should simply request a quote from one of the top service providers.\u00a0Based on this information, you can easily calculate the savings and find out if the switch is justified.If you already have some experience with pay per mile insurance and you\u2019d like to share it with us, feel free to list some of your opinions in the comments below."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Personal Finance","item":"https:\/\/moneydoneright.com\/personal-finance\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Saving And Budgeting","item":"https:\/\/moneydoneright.com\/personal-finance\/\/saving-and-budgeting\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"Can Pay Per Mile Insurance Save You Money?","item":"https:\/\/moneydoneright.com\/personal-finance\/saving-and-budgeting\/is-pay-per-mile-insurance-worth-it\/#breadcrumbitem"}]}]