Pay per mile car insurance is a great way to reduce your monthly car insurance costs. This monthly expense, depending on your driving record, can be one of your largest.
Pay per mile automobile insurance works by adjusting your monthly rate depending on the number of miles that your drive in an average month. This means that for those who drive considerably less miles than the average driver, about 450 miles or less per month, your rates are drastically reduced.
Currently there are only a handful of car insurance companies that offers this type of coverage although more and more are offering including:
- Esurance Pay Per Mile
- Milewise (Allstate)
Other companies offer programs similar to pay per mile insurance, but is usage based. Their programs may include discounts for driving less, safe driving or even when you drive. These companies include:
- Progressive Snapshot
- National General Low Mileage Discount
- Nationwide SmartRide
- Travelers Intellidrive
Many insurers will say that your rate is not as high if you drive less often, the discount they give is rarely more than 2%. Most do not actually offer a discount although they will lead you to believe they do. The only insurer who offers drastic discount and a true pay-per-mile rate is MetroMile. The Metro part of the name stems from the origin of pay-per-mile insurance. Many people who live in larger cities do not drive to work and rarely outside of work. These drivers were the original target audience for MetroMile although their popularity is growing beyond that demographic as well.
Pay-per-mile car insurance is perfect for those who drive less than 500 miles per month. If you only drive a short distance to work or school and do not any long-distance driving then you may qualify for a much better rate than you would with traditional car insurance. You may save as much as 50% by switching to a pay-per-mile car insurance plan. The key to maintaining your coverage and rate is that you cannot go over the allotted mileage. Your mileage is tracked by MetroMile via a device that connects to your car's computer. This device is called a Mile Metronome and must be installed on your vehicle to ensure coverage.