understanding your insurance policy

4 Things to Know About Pay-Per-Mile Auto Insurance

27 April 2021 by Tuĝba Van Den Heijkant

If you drive well under a thousand miles per month, you may want to consider a pay-per-mile insurance plan. With a pay-per-mile insurance plan, you will be able to keep your insurance costs reasonable and in line with your actual vehicle usage.

Be Rewarded for Your Low Mileage

When you get your insurance, your provider will ask you how much you drive, what you drive for, and how often you drive for work and other activities. All these questions are designed to determine how often you are out on the road. This matters as the insurance company use this information to decide what to charge you. Basically, the more you are out on the road, the greater your risk of getting into an accident. The less you are on the road, the less chance you have of getting into an accident. With a low-mileage pay-per-mile policy, you are rewarded for lowering your risk by not being out on the road as often.

Get the Same Coverage Types

With a pay-per-mile policy, how you pay and what you pay is what changes, not the type of coverage you are entitled to. You can still enjoy collision coverage, comprehensive coverage, uninsured motorist coverage, liability insurance, personal injury protection, and all the other add-ons that you can add to your insurance policy. You will get all of that coverage; however, you pay for that coverage based on how much you drive each month.

Other Factors Still Apply

The rate you pay for your coverage will be based on factors other than how many miles you drive. The base rate that you are charged per mile will be based on various factors such as your driving record, age, type of vehicle, and location. The base rate is based on personal factors and is going to vary from one person to another.

Factoring Mileage

The miles that you are charged each month will be based on the usage of a measuring device. You will have to agree to put a measuring device that keeps track of how many miles you drive each month. Alternatively, your auto insurance may allow you to submit pictures of your odometer every month as another way to report mileage.

Your bill will include a base charge and then a per-mile charge that is unique to you. Some companies will charge you every day, and others will charge you based on your mileage for the previous month, adjusting the rate every month based on the previous month's usage.

If you don't drive that often, it can be worth talking to a car insurance agent to figure out whether you'd benefit from a pay-per-mile plan.

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