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Why do you need car insurance?
Car insurance can help pay medical bills, repairs, certain legal defense costs, and more, if you’re involved in a covered accident.
READ MORE: CAR INSURANCE COMPANIES IN UNITED STATE
Examples of risks a driver may face
You cause an accident
Sometimes, the unexpected happens. Liability coverage takes care of expenses related to injury, death or damage to property of others when you’re at fault.
You accidentally damage your own car
Don’t get stuck with the bill after an incident. Collision coverage helps repair your vehicle when it is damaged in an accident or other collision.
Hail dents your car
Accidents don’t always involve another vehicle. Comprehensive coverage helps repair your car if it is involved in a non-collision incident, including hail damage, theft, or fire.
An uninsured driver hits you
Uninsured and underinsured motorist coverage helps pay for your injuries and may help repair your vehicle when the other driver is at fault and doesn’t have insurance.
Stories & tips for everyday life
What is pay-per-mile car insurance?
How does pay-per mile insurance work?
Vehicle owners who choose pay-per-mile car insurance usually pay a flat, daily rate as well as a per-mile rate. If you opt for this type of usage-based car insurance, the miles you drive are typically tracked by a telematics device that plugs into your vehicle's onboard diagnostic port, which is usually located under the dashboard. The data it collects is reported to your insurance company. You may also be able to view your mileage and other driving information, such as speed and braking trends, via an app or account from your provider.
Some insurers, such as Allstate, require you to preload funds onto your pay-per-mile account. Then, charges are deducted from your account based on how many miles you drive.
As with a traditional car insurance policy, a pay-per-mile policy allows you to select different types of coverage, such as comprehensive and collision, and set the limits and deductibles that are right for you.
Is pay-per-mile insurance worth it?
Pay-per-mile car insurance may be especially appealing to people who drive less than the average person. For instance, if you work from home or rely mostly on public transportation, it may make financial sense for you to pay based on the limited miles you drive each day.
Mile-based insurance may also be a good option for drivers who want more control over their car insurance costs, since choosing to drive less may help lower your car insurance bill.
Some insurers set a maximum daily mileage charge. In that case, you'll only pay up to that limit, helping you avoid unexpected insurance costs if you exceed the maximum miles.
How much does pay-per-mile insurance cost?
Your daily rate and per-mile rate add up to the cost of your car insurance. Both rates are typically based on similar factors used to determine a traditional car insurance premium. For instance, the coverages on your policy, type of vehicle you own and your driving history will likely be considered when your insurer determines how much you'll pay for the daily rate and per-mile rate.
Not all insurers offer pay-per-mile car insurance, and it may not be offered in every state.
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