What Is Pay-Per-Mile Car Insurance?
Pay-per-mile insurance can give low-mileage drivers serious discounts, but not all insurance companies offer this type of coverage.
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Written byMelanie Lockert
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10+ years writing on personal finance topics
Host of the Mental Health and Wealth podcast
Melanie is a blogger, author, and speaker specializing in personal finance and debt management. She’s also the author of the blog and book “Dear Debt.”
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Edited bySara Getman
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Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.
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Reviewed byDaniel Roccato
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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.
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Data reviewed byKonstantin Halachev
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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.
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Table of contents
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.
Quick Facts
Most pay-per-mile car insurance programs charge a monthly base rate and a low per-mile cost.
You may see insurers refer to pay-per-mile with many different terms, including pay-as-you-go, pay-as-you-drive, and pay-how-you-drive.
If you drive less than the national average of 13,473 miles per year, pay-per-mile car insurance could save you money.
What is pay-per-mile insurance?
Pay-per-mile insurance is directly tied to the number of miles you drive each month. Through telematics technology, auto insurers can track your mileage and driving behavior to offer up-to-date and accurate rates.[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.
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How does pay-per-mile insurance work?
When you sign up for pay-per-mile insurance, your insurance company will use a telematics device to track your miles and driving data. Insurers will typically send a device for you to put in your vehicle that communicates with a mobile app. If you don’t want to share driving data through a device, some companies, like Mile Auto, send text and email reminders to prompt drivers to submit odometer readings.
The premium your insurer charges you will vary. Combined with your per-mile fee based on your driving habits, a monthly base rate based on various risk factors, such as location and age, forms the foundation of your rate.
Pay-per-mile insurance typically offers the standard coverage. But company size may affect your options. For example, pay-per-mile coverage from large insurers like Nationwide and Allstate offers access to all the company’s coverages. Smaller companies like Mile Auto only offer the state minimum, full coverage, and a couple of optional coverages. In general, here are the coverages you can expect from a pay-per-mile company:
Liability insurance
Every state except New Hampshire requires drivers to carry liability insurance, which pays for damage to the other vehicle and injuries to the other driver and passengers in an accident you’re at fault for.
Collision insurance
Collision insurance is an optional coverage that’s part of full-coverage car insurance. It can pay to repair your car if it’s damaged in an accident. If you lease or finance your car, your leasing company or lender will likely require you to buy full-coverage insurance.
Comprehensive insurance
If your car is stolen or suffers damage caused by something other than an accident, comprehensive coverage can pay to repair or replace your vehicle. Comprehensive insurance is also part of full coverage, so you may have to buy it if you lease or finance your car.
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.
One of the leading low-cost companies for pay-per-mile insurance, Mile Auto focuses exclusively on this coverage type. The company claims that drivers can save up to 30% or 40% on car insurance when compared to current rates for traditional insurance.
Instead of using a tracking device, Mile Auto has drivers send periodic photos of their odometer.
How mileage is tracked: Through odometer readings
Availability: AZ, FL, GA, OH, OR, TN, TX
Base rate: Depends on driver profile
Per mile fee: Depends on driver profile
Mobile app features: No mobile app
Nationwide’s SmartMiles program offers pay-per-mile coverage and a 10% safe driver discount after renewal. Under this program, policyholders have a daily mileage cap of 250 miles.
How mileage is tracked: In-vehicle tracking device or through connected car mileage tracking
Availability: Nationwide except AK, HI, LA, NC, NY, and OK
Base rate: Depends on driver profile
Per mile fee: Depends on driver profile
Mobile app features: Claims tracking, billing, insurance ID card
Allstate’s pay-per-mile program, Milewise, tracks your mileage and gives feedback on your driving habits. It charges a per-mile rate as well as a low daily rate; policyholders still pay the daily rate even if they don’t drive that day.
Milewise offers two options: a traditional pay-per-mile policy and Unlimited, which only pays the daily rate and not a per-mile rate.
How mileage is tracked: Mobile app and in-car device
Availability: AZ, DE, FL, ID, IL, IN, MD, MA, MI, MN, MO, NJ, OH, OK, OR, PA, RI, SC, TX, VA, WA, WV
Base rate: Depends on driver profile
Per mile fee: Depends on driver profile
Mobile app features: Claims tracking, billing, insurance ID card, driving behavior tracking
Drivers in the military community who want pay-per-mile insurance can check out Noblr. This is especially helpful if you or a family member is on deployment and leaving a car unused. Rates consist of a static base rate and a fluctuating variable rate that takes your driving behavior and mileage into account.
How mileage is tracked: Mobile app
Availability: MD
Base rate: Depends on driver profile
Per mile fee: Depends on driver profile
Mobile app features: Driving behavior tracking, discount rewards, claims and account management, insurance ID card
Alternative to pay-per-mile insurance: Hugo
| User Reviews | 4.1 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 7 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $208/mo |
4.1
Best choiceBased on 148 verified guest reviews and ratings
How drivers feel about Hugo
Drivers appreciate the pay-as-you-go option and affordability but dislike the lack of full coverage and poor customer service.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
How drivers feel about Hugo
Drivers appreciate the pay-as-you-go option and affordability but dislike the lack of full coverage and poor customer service.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
Reviews (57)
Andrea
April 15, 2025
Verified Review
Excellent
Hugo is awesome.
Donna
April 2, 2025
Verified Review
No Thanks
In my experience, Hugo is an option for people who are struggling. However, it seems to exploit those who are struggling because the insurance only covers the minimum requirements. This means that the policyholder will be fully responsible and have to pay out of pocket for anything that goes wrong with the vehicle.
Rebekah
March 18, 2025
Verified Review
Never Able to Speak with Customer Service, So I Switched!
I was never able to speak with someone, so I switched!
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
NRA.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
NRWhy we picked this company
Hugo offers short-term car insurance policies rather than the traditional six- to 12-month policy. Drivers can choose a policy term of three, seven, 14, or 30 days, or six months, and policyholders can pay smaller amounts more frequently instead of all at once. Drivers also receive instant proof of insurance.
Hugo currently only offers state-minimum liability coverage in 15 states. J.D. Power and AM Best haven’t yet evaluated Hugo’s customer satisfaction or financial strength.
Pros
Short-term policies
No up-front down payment required
Flexible, pay-as-you-go insurance
Cons
Available in only 15 states
Coverage options vary by state
No discounts available
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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 can make a lot of financial sense for certain groups of people, including:
Remote workers
Retirees
Students who live near campus
Low-mileage drivers
Pay-per-mile insurance FAQs
Before making the switch to pay-per-mile insurance, compare your options and find answers to common questions about this type of coverage below.
Is there a difference between telematics and pay-per-mile car insurance?
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.
Is pay-per-mile insurance worth it?
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.
What does Metromile charge per mile?
Lemonade bought Metromile in 2022, so the company is no longer writing policies. Lemonade offers pay-per-mile policies in Arizona, Washington, and Oregon.
Is Milewise a good idea?
Allstate offers a pay-per-mile insurance option called Milewise. This option works well for low-mileage drivers, such as employees who work from home, retirees, and people who take public transportation frequently. If you live in one of the 21 states with Milewise available, you can get a low daily rate and save money on insurance if you drive infrequently.
How do insurance companies track your mileage?
Insurance companies that offer pay-per-mile insurance typically require you to install a telematics device in your car that pairs with a mobile app. This sends mileage data to the company to help determine rates. Some other companies, like Mile Auto, may allow you to regularly take photos of the odometer instead of installing a device.
What if you drive less than 25 miles a day?
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.[2]
Track your mileage for a month to see how much you actually drive if you’re considering a policy.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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Sources
- National Association of Insurance Commissioners. "Telematics/Usage-Based Insurance."
- Federal Highway Association. "Average Annual Miles per Driver by Age Group."
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Melanie Lockert
Melanie Lockert is the founder of the blog and author of the book, "Dear Debt." Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Allure, Business Insider, Credit Karma, Fortune, and more. She is also the co-founder of the Lola Retreat and host of the Mental Health and Wealth show podcast. She lives in Los Angeles and enjoys jazz music, traveling, coffee, and spending time with her two cats and partner.
Melanie has been a contributor at Insurify since November 2022.
Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.
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.
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.