Pay-Per-Mile Insurance Explained


Pay-per-mile insurance is a sort of collision protection where your payment sum depends on the quantity of miles you drive.
Pay-per-mile insurance is a sort of collision protection where your payment sum depends on the quantity of miles you drive. Best for individuals don’t cover a lot of mileage every month.

Dive deeper into how this sort of inclusion functions, the upsides and downsides, and how to choose if pay-per-mile protection may be ideal for you.

Definition and Examples of Pay-Per-Mile Insurance

Pay-per-mile insurance is a sort of vehicle insurance contract with an installment that fluctuates in light of the number of miles you that drive. This sort of protection likewise normally charges a base rate notwithstanding a for every mile rate.

  • Alternate name: Mileage-based insurance

For instance, say your everyday base rate is $1.50 and your per-mile rate is $0.06. On the off chance that you travel 10 miles in a single day, you’d pay $0.60 in addition to $1.50, for a sum of $2.10. Following a month of comparable driving, your premium would be about $63.

How Pay-Per-Mile Insurance Works 

Pay-per-mile insurance has a few key components that come together to make it work. Here’s what you should know. 

Premium Rate Calculation

Your top notch rate is frequently separated into two sections: a base rate and an expense for each mile. To compute the sum you pay, the safety net provider will duplicate the expense per mile by the quantity of miles you drove, then, at that point, add the base rate.

Suppose you’re investigating new accident coverage choices. You demand statements from Across the country, which offers both of you choices:

  • A traditional policy with unlimited mileage for $133
  • A pay-per-mile policy with a base rate of $60 per month and a per-mile rate of $0.07

By doing the math, you can see that if you travel under 1,042 miles each month or around 34 miles each day, the per-mile plan will be less expensive.

Mileage Tracking 

To track how many miles you drive, insurers send you a device that plugs into your vehicle. 


How you’re charged for a compensation for each mile strategy differs by protection supplier. A typical methodology is a postpaid model, where you’re charged month to month founded on the quantity of miles you drove the earlier month. Notwithstanding, a few back up plans, as Allstate, utilize a prepaid model where they deduct the expense of each excursion from a current equilibrium.

Online Mileage and Premium Tracking

Safety net providers may likewise empower you to follow your mileage, premium, and more on the web or through their application. For instance, you could see your month-to-date mileage and premium, as well as how they contrast with earlier months. This internet following choice assists you with checking whether you’re over spending plan, so you can downsize your driving until the end of the month.

Maximum Daily Mileage Limits

These projects likewise frequently accompany greatest day to day mile limits. That implies on the off chance that you go on a long street outing, your day to day mileage costs won’t soar. For instance, Freedom Shared covers everyday miles at 150, and Cross country finishes out at 250 miles.

Extra Discounts

While following your speed, a few guarantors can likewise gather driving conduct information that assists them with dissecting your gamble level. Thus, a few organizations offer safe driving limits to policyholders who show capable driving propensities.

Pros and Cons of Pay-Per-Mile Insurance


  • Low-mileage drivers can save money 
  • Tracking mileage is easy
  • Gain insights into driving behaviors and potentially earn a discount


  • Could be more expensive 
  • Not available in all states
  • Requires vehicle tracking
Pros Explained
  • Low-mileage drivers can save money: If you drive less than the average driver, you could pay less for pay-per-mile insurance than you would for a traditional policy. 
  • Tracking mileage is easy: Tracking devices and apps make it easy to keep tabs on your mileage, which can help you stay under budget. 
  • Gain insights into driving behaviors and potentially earn a discount: You may also receive feedback on your driving behavior or the driving behavior of others in your household. Some insurers will offer a discount for safe driving habits.
Cons Explained
  • Could be more expensive: If you end up driving more miles than you expected, your pay-per-mile plan could actually cost you more than a traditional policy. 
  • Not available in all states: Pay-per-mile programs aren’t available in all states with all insurers, so they may not be available in your area. 
  • Not compatible with all vehicles: The tracking devices are often only compatible with vehicles newer than a certain year, so not all drivers will be able to use them. 
  • Requires vehicle tracking: You will need to install a tracking device in your vehicle, which may not appeal to all drivers. 

How To Get Pay-Per-Mile Insurance

If pay-per-mile protection sounds appropriate for you, check with your ongoing auto back up plan to check whether it’s accessible in your space. Likewise, it’s really smart to look around with the main vehicle safety net providers to see which one offers the best by and large incentive for your circumstance.

While looking at approaches, make certain to consider the base rates, cost per mile, greatest day to day mileage limits, charging models, and different advantages like safe driving limits.