Is Pay-Per-Mile Car Insurance Right for You?
Driving less these days? You might be able to save some cash on your car insurance with a pay-per-mile policy. Here’s a look at what you should know about this potentially money-saving coverage option.
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How it works
Instead of paying a flat rate for insurance, regardless of how much you drive, pay-per-mile coverage works just as the name suggests — you pay lower rates for driving less.
According to Forbes, pay-per-mile gives you more control over your insurance rates, while still offering all of the coverage you’d get from a traditional insurance policy. That includes roadside assistance, uninsured driver protection, collision coverage, comprehensive coverage, and other add-ons you can choose to supplement your policy.
While some insurance companies offer low-mileage discounts, you typically have to drive below a certain number of miles per year. Furthermore, pay-per-mile insurance differs from usage-based insurance. The latter type of coverage monitors your safe driving habits rather than your mileage.
Measuring and reporting your mileage
If you’re going to pay for insurance by the mile, you’ll have to track and report your mileage. You’ll achieve this by plugging a small device into a port near your car’s steering wheel. Typically, you’ll have to drive a vehicle that’s newer than the 1996 model year for this mileage counter to work. And on top of that, some counters may not be compatible with hybrid models.
Some mileage counters are more sophisticated than others. They can record the times that you drive, your safety habits, and your location. These factors won’t raise your rate, but can qualify you for discounts. These high-tech devices can even serve as stole vehicle locators.
If you don’t care for the idea of having a tracker in your car, check to see if your insurance provider offers the option to send in a photo of your odometer every month.
Typically, you’ll pay for a base rate, along with a charge for the miles you travel. Rates may vary based on your driving record, age, and other factors that influence insurance costs. Furthermore, you may qualify for discounts based on your driving habits, or insuring multiple vehicles under one policy.
Before you change your car insurance, be sure to shop around and get several quotes. Compare the cost and the amount of coverage to your current policy — and see if you can use those quotes to negotiate a better rate.
Kimiko Kidd is a native Daytonian. She graduated from Wright State University with degrees in environmental science and sociology. She loves her trusty old Honda Civic, but dreams of owning a 1974 Ford Falcon XB with a custom paint job and a vintage Kawasaki Z1000. In her free time, Kimiko can be found watercolor-painting, baking muffins, collecting rocks, playing old-school Nintendo games, writing her novel, sewing stuffed animals, and cosplaying as her favorite Mad Max characters. See more articles by Kimiko.