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Written by Katie Powers
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Katie Powers
Licensed P&C Agent, Senior Insurance Editor
- Licensed auto and home insurance agent
- 4+ years experience in insurance and personal finance editing
- NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Edited by MacKenzie Korris
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MacKenzie Korris
Licensed P&C Agent, Insurance Copy Editor
- Licensed property and casualty insurance agent
- 10+ years editing experience
- NPN: 21630969
MacKenzie Korris is an insurance copy editor with a producer’s license for property and casualty insurance in Missouri.
Reviewed by Daniel Roccato
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Daniel Roccato
Advisor
- 30+ years in financial services
- Clinical Professor of Finance, University of San Diego
Dan is a well-recognized and widely quoted financial services expert, regularly appearing in a variety of national and local media as a subject matter expert.
Data reviewed by Konstantin Halachev
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Konstantin Halachev
VP of Engineering & Data Science
- 7+ years experience in data analysis
- Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
Why you can trust Insurify: Comparing accurate insurance quotes should never put you at risk of spam. We earn an agent commission only if you buy a policy based on our quotes. Our editorial team follows a rigorous set of editorial standards and operates independently from our insurance partners. Learn more.
Pay-per-mile car insurance is an innovative type of car insurance that rewards policyholders who drive less with potentially lower rates. As the name indicates, insurance companies typically charge you by the mile on top of a base rate for pay-per-mile insurance.
This type of coverage presents a cost-effective option for remote workers, retirees, self-employed people, and infrequent drivers. You can purchase this coverage through Mile Auto, Nationwide’s SmartMiles program, and other companies.
What is pay-per-mile insurance?
Pay-per-mile insurance uses telematics to track the number of miles you drive each month and charges you a monthly base rate plus a low per-mile fee.[1]
This type of coverage is ideal for people who work from home, use public transportation, are retirees, or are self-employed. Pay-per-mile insurance companies typically have a daily mileage cap or a limit on the number of miles you pay for.
Premium variability is the main difference between traditional and pay-per-mile car insurance. Purchasing traditional auto insurance may allow you to better plan for how much you’ll pay for coverage each month and year. Rates for pay-per-mile coverage fluctuate based on driving activity, in contrast, but will ideally cost less for low-mileage drivers than traditional insurance.
Pros and cons of pay-per-mile insurance
Pay-per-mile insurance can be a good option if you don’t drive a lot. But it’s not for everyone, so it’s important to weigh the advantages and disadvantages before you buy a policy.
Pros
- Low-mileage drivers can see significant savings
- Both full-coverage and liability-only pay-per-mile coverage available
- Some insurers don’t charge for mile overages
Cons
- Not available in every state
- Not available from every insurer
- Telematics devices may raise privacy concerns
Best pay-per-mile insurance companies
Not all car insurance companies offer pay-per-mile insurance. Comparing multiple insurance companies will help ensure you’re securing the best rate and coverage possible. Learn more about the best pay-per-mile insurance companies below.
| Company | Base Rate | Per-Mile Rate | Availability | Best For |
|---|---|---|---|---|
| Mile Auto | Varies based on standard rating factors | Varies based on standard rating factors | AZ, CO, FL, GA, OH, OR, TN, TX | Simple mileage tracking |
| Nationwide SmartMiles | Varies based on standard rating factors | Varies based on standard rating factors | Nationwide except AK, HI, LA, NC, NY, and OK | Broad availability area |
| Allstate Milewise | Varies based on standard rating factors | Varies based on standard rating factors | AZ, DE, FL, ID, IL, IN, MD, MA, MI, MN, MO, NJ, OH, OK, OR, PA, RI, SC, TX, VA, WA, WV | Unlimited option charges only a daily rate (not a per-mile fee) |
Pros and Cons of Companies
Mile Auto: Simple mileage tracking
User Reviews: 4.5
Full Coverage: $135/mo
Liability: $74/mo
Pros:
- Low-mileage drivers may see significant savings
- You don’t have to install a telematics device in your car
- Offers roadside assistance and rental reimbursement add-ons
Cons:
- Available in only seven states
- No bundling or discount opportunities
Nationwide SmartMiles: Available in most states
User Reviews: 4.2
Full Coverage: $187/mo
Liability: $93/mo
Pros:
- Offers 24/7 roadside assistance coverage add-on
- SmartRide (for safe drivers) and SmartMiles (for low-mileage drivers)
Cons:
- Below-average customer satisfaction scores from J.D. Power
Allstate Milewise: Flexible coverage options
User Reviews: 3.8
Full Coverage: $147/mo
Liability: $72/mo
Pros:
- Ample opportunities for bundling discount
- Offers a pay-per-mile option
Cons:
- Low customer satisfaction
How much can you save with pay-per-mile insurance?
Savings from pay-per-mile insurance can vary widely, based on insurer, state, your driving profile, and more. Insurify data points to average savings of 25%–38% for liability-only pay-per-mile versus standard minimum coverage, and 27%–40% for full coverage.
When does pay-per-mile insurance make sense?
The primary benefit of pay-per-mile insurance is the potential for paying less for car insurance. The fewer miles you drive, the less you have to pay for car insurance coverage. People who drive a lot for work and other regular commutes don’t benefit from this insurance model.
Pay-per-mile insurance FAQs
Auto insurers use telematics devices to help track your mileage and driving behavior, which qualifies as usage-based insurance. Telematics car insurance may be used to offer you discounts for safe driving, but pay-per-mile insurance regularly tracks your miles to assess rates. What gets tracked and how your miles or behavior determines your rates vary by insurer.
Pay-per-mile car insurance can be a money-saving option for people who drive very little — such as remote workers, public transportation commuters, seniors, and teens. A low monthly base rate and per-mile charge could cost less than standard car insurance for low-mileage drivers.
In general, pay-per-mile coverage is best suited for people who drive less than the federal average of 13,000 miles per year, or about 36 miles per day.