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Pay-Per-Mile Insurance: Could It Pay Off for You?

Jason Metz

If you're the type who doesn't drive much, pay-per-mile car insurance could save you money.

Also known as "pay-as-you-go insurance," with a typical pay-per-mile plan you'll pay a base rate and an additional per-mile rate. Your monthly bill can vary month to month based on how much you drive.

You can purchase full coverage car insurance that's pay-per-mile, which includes liability, collision and comprehensive coverage.

Pay-per-mile insurance can be a good fit if you:

  • Use public transportation often.
  • Work from home.
  • Have a car but rarely drive.
  • Are a stay-at-home parent.
  • Are retired.

How does pay-per-mile car insurance work?

Pay-per-mile car insurance tracks your miles driven with a device that you plugs into your onboard diagnostics (OBD-II) port.

How are base rates and per-mile rates determined?

Like traditional car insurance rates, the base rate and per-mile rate are determined using factors such as the coverage types you buy (such as collision and comprehensive insurance), the type of car you drive, your age and driving history.

How many miles can I drive?

You can drive as many miles as you want. While pay-per-mile car insurance is designed for low-mileage drivers, the definition of "low-mileage" is typically less than 10,000 miles per year.

What if I take a long road trip?

You can take a road trip without getting a whopping insurance bill. Some pay-per-mile insurance plans won't charge you if you drive over a certain amount of miles per day. For example, if your plan is capped at 250 miles per day, you'll pay a per-mile rate for the first 250 miles and you won't not be charged for the miles thereafter.

Who offers pay-per-mile insurance?

Allstate Milewise

  • Daily cap of 250 miles to allow for longer road trips. Allstate also offers an "unlimited" version of Milewise, suited for multi-car policies where one vehicle is on the pay-per-mile option and another vehicle is not.

Esurance pay-per-mile

  • Daily mileage capped at first 150 miles to allow for longer road trips.
  • Currently only available in Oregon.


  • Daily mileage capped at first 250 (150 in New Jersey) to allow for longer road trips.
  • Multi-car discount for each vehicle's base rate and per-mile rate.

Nationwide Insurance SmartMiles

  • Daily mileage capped at first 250 miles to allow for longer road trips.
  • Up to 10% safe-driving discount (after first policy renewal).

What's the difference between pay-per-mile and usage-based insurance?

Usage-based insurance (UBI) tracks driving behaviors like speeding, sharp turns and hard stops. Your price is partly based on these driving behaviors. UBI programs typically reward safe drivers with lower rates and discounts.