There is a unique option for car insurance, not to mention a potentially cheaper option, based around how much you are driving. You pay by the mile for your car insurance. The notion is for those whose driving is very limited, less than 10,000 miles in a year, which is said to ultimately save you as much as hundreds each year on your auto insurance. Anything exceeding those miles inclusive of the base rate has the possibility of making the service rather expensive.
A driver who has a clean driving record could obtain a full auto insurance plan for under $1,000 if they have a low monthly mileage count. With the plans that are available with most of the various companies on the market, you are still receiving the liability portion as well as collision and uninsured/underinsured with comprehensive coverage. As a means to sign up for the monitors that plug into your car’s diagnostic port in order to track your miles, there are requirements similar to what there would be to obtain standard car insurance.
- Age
- Credit scoring
- Driving history
- Proper equipment to sustain the monitors in your car
How Does Pay-Per-Mile Car Insurance Work?
Most of the carriers who provide the pay-per-mile coverage charge a flat monthly fee in addition to the mileage charge. You may pay a base rate at $40 per month and then perhaps 5 cents for each mile. In that type of scenario, if you drove for approximately 500 miles in one month, your payment would then be $65 every month and then a total for the year of $780. As with a traditional carrier, the fee is going to vary for each insured based on their particular credentials as far as age, driving record, location, etc.
For the most part, you are not penalized for the occasional trips that you may take. There is a daily cap that you won’t get charged if you go beyond that for some of the carriers. Make sure you find a carrier with that as their policy before you sign on with one of them. Don’t get carried away, though. It may get pretty costly if you choose to drive across the country.
How Are The Miles Tracked?
With a majority of the carriers implementing the pay-per-mile car insurance policies, they are using a monitor that is plugged into your car’s diagnostic portal. This is the portal that most mechanics will use in order to diagnose when you’re having issues with your car. The monitor will send the insurance carrier loads of information which you will also have access to using the app or online. It’s very informative as far a giving you not just the mileage but data pertaining to the car’s health as well as your location. There’s also some monitors that will give you various different alerts, e.g. if your street is going to be cleaned and you need to move your car out of the way.
Things You Should Think About
If you aren’t realistic about the kind of driving that you do, you could possibly end up paying more than you would with traditional coverage. The monitors that some of the carriers use are going to be paying attention not only to how much you drive but also to how you’re driving. So, if you’re driving badly, your rates will increase regardless of how infrequently you’re driving. Also, if you actually drive a lot more than what would be deemed infrequent enough to be of benefit on this plan, you should stick with the traditional carriers as you’ll spend way more doing it this way than with the standard providers.
In Conclusion
Overall, for those who don’t drive very much and have a really good driving record, this pay-per-mile car insurance option could actually save a good bit of money on their car insurance expenses. But only in those situations and if all of the traditional requirements are met. If you’re not a good driver, you should probably avoid a monitor that is going to be tracking that, which will end up raising your insurance rates.
If you feel that you might be paying way too much for your auto insurance premiums based on the amount of driving that you do, contact your insurance carrier and see if there are options available where you can get your rates lowered either through a discount or some other type of program. If they don’t, perhaps there’s another company that would be more suited for your needs that may offer a discount or may be overall cheaper as far as their premiums compared to what you may be currently paying.
If you want the pay-per-mile car insurance and it hasn’t reached your state quite yet, just be patient. These programs are bound to expand as they catch on.