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Nationwide Has New Pay-Per-Mile Auto Insurance Policy

Amy Danise

If you don't drive much, you might be able to save money with a "pay-per-mile" auto insurance policy. Maybe you have a car but work from home, use public transportation or are retired. With pay-per-mile auto insurance, your bill can vary month to month depending on how much you've driven, and you have the potential to save money over a traditional insurance policy.

If this sounds good, this year you may have the option to pay by the mile with Nationwide Insurance. The company is rolling out SmartMiles, first in Illinois and with plans to expand to other states. With a SmartMiles policy, drivers will install a small car device that keeps track of miles. You'll pay a base rate plus a per-mile rate. You'll be able to keep track of how much you've driven through a SmartMiles portal.

You won't get a whopping bill if you take a big summer road trip because Nationwide will count only the first 250 miles per day.

Pay-per-mile insurance is different from "usage-based" auto insurance. Usage-based insurance policies generally factor in driving behavior like hard stops, hard acceleration and time of day driving, along with mileage.

If you have multiple cars in your household, Nationwide says you don't have to use pay-per-mile insurance on all of them. For example, you could put one car under SmartMiles and another car under Nationwide's SmartRide, which uses mileage, hard braking and acceleration, idle time in traffic and other factors in the price.

Here's more about Nationwide's SmartMiles.

Other auto insurers offering pay-per-mile insurance are Allstate, Esurance (in Oregon) and Metromile.