Is Pay-Per-Mile Car Insurance Right for You?

Samantha Kostaras
Samantha Kostaras
Insurance Reporter

What Is Pay-Per-Mile Car Insurance?

Pay-per-mile car insurance is a type of insurance policy where your monthly rate directly depends on the number of miles you drive. Traditional insurance offers coverage for a flat monthly rate, no matter how many miles you drive in the month, relying on factors like accident history and age to determine your risk. Pay-per-mile policies will take these factors into account to help price your insurance, but your rate will be broken into two components: a flat, base rate and a variable, per-mile rate.

Base Rate + (Variable Rate x Miles Driven) = Insurance Bill

How Does Pay-Per-Mile Insurance Work?

As with traditional insurance, pay-per-mile insurance will typically offer standard coverages like liability, comprehensive, and collision, and it will provide that coverage whether your car is parked or on the move. Unlike traditional insurance, though, pay-per-mile policies will need to monitor how many miles you drive.

Pay-per-mile insurers typically offer an app that can give you visibility into your driving habits, but your miles will be tracked by a small device that plugs into your car underneath your dashboard. This device connects with your insurer to verify how far you’ve driven in a given period of time, allowing your insurer to accurately calculate your monthly bill. The per-mile system increases the transparency of your monthly insurance bill and gives you control of your savings. It does mean, however, that your monthly bill can fluctuate — something you’ll want to account for in your budget.

Insurers will typically assign a maximum value to your daily mileage so that taking one road trip doesn’t break the bank for you, but it could still noticeably increase your bill for that month.

How Is Pay-Per-Mile Different Than Other Usage-Based Insurance?

If you’re looking to save money with a nontraditional insurance option, you may also want to consider a car insurance policy that takes into account the quality of your driving, like one from Root. While pay-per-mile insurance is primarily priced based on how far you drive and measured in miles, there are other types of usage-based insurance that are priced based on how safely you drive and measured by factors like acceleration, braking speed, and time of use. Some insurers will combine the two methods, charging per-mile but using data on your driving behavior to influence your per-mile and base rate. When gathering quotes, it will be helpful to have an idea of how many miles you drive each month to help you compare flat monthly premiums and per-mile rates.

Will Pay-Per-Mile Car Insurance Save You Money?

That depends on how much you drive and what base and per-mile rates you qualify for. We recommend requesting a quote to see how much you could save, but in general, there are certain groups that would tend to benefit from these plans and some that would not.

Drivers who are likely to save with pay-per-mile insurance include:

  • People who live in urban areas and take public transportation often
  • Workers who telecommute
  • People who commonly combine their trips
  • Teens who are both safe and low-mileage drivers
  • Owners of an additional vehicle they rarely drive

Drivers who are not likely to save with pay-per-mile insurance include:

  • Workers with long commutes
  • Frequent road-trippers

Where Can You Buy Pay-Per-Mile Car Insurance?

Currently, four auto insurers offer true pay-per-mile policies: Metromile, Allstate, Nationwide, and Esurance.


Metromile is a tech-driven insurer whose flagship product is pay-per-mile insurance. The Metromile mobile app, although not required to qualify for coverage, offers extra benefits like a parking finder and trip optimizer. Founded in 2011, Metromile is still a relatively new insurer and has not yet been rated by A.M. Best, an agency that measures the financial strength of insurance companies, so it may not be a good fit if you highly value the strength of a well-established company.

  • Only counts first 250 miles per day, 150 in New Jersey
  • Currently available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington

Allstate — Milewise

Allstate, the fourth-largest insurer in the U.S., launched its pay-per-mile car insurance program, Milewise, in 2018. Unlike programs from Metromile and Nationwide, Allstate’s Milewise policy is billed on a daily basis. Users preload money onto their account on the Allstate mobile app and select a monthly spending target, and Allstate charges their account at the completion of each trip, usually within hours. When users reach a minimum balance, the app can automatically reload a determined balance to make sure there’s always enough money in the account. This daily billing and regular account preloading may not be for everyone, but it is a unique offering for drivers who want to keep tabs on their driving and spending.

  • Allstate will assign users a daily mileage cap
  • Currently available in Arizona, Delaware, Idaho, Illinois, Indiana, Maryland, New Jersey, Ohio, Oregon, Texas, Virginia, Washington, West Virginia

Nationwide — SmartMiles

Nationwide is another top-10 insurer that has moved into pay-per-mile insurance, bringing the financial security of an A+ rating from A.M. Best to this relatively new policy type. Nationwide’s program, SmartMiles, is also the only program on this list that advertises a discount (up to a 10%) for driving safely, based on data the tracking device collects. We would recommend requesting a quote for SmartMiles if you are interested in trying pay-per-mile insurance, prefer a monthly billing cycle, and are looking for an insurer that is well established.

  • Only counts first 250 miles per day
  • Currently available in Illinois 


Esurance introduced Pay Per Mile, its mileage-based car insurance plan, in 2015 to serve the Oregon area, and it has not yet expanded into other states. This type of coverage is harder to find on Esurance’s website and during the quote process, so we recommend reaching out to an Esurance agent through the interactive chat or over the phone if you are interested in learning more or signing up for the Pay Per Mile plan.

  • Only counts first 150 miles per day
  • Currently available in Oregon

What’s Next?

About the Authors

Samantha Kostaras

Samantha Kostaras Insurance Reporter

Samantha Kostaras is an insurance reporter who covers personal finance and insurance. After a degree in finance from the University of Alabama and stint at Morgan Stanley, she worked as a financial analyst before becoming a journalist. Her writing has appeared in The Simple Dollar,,, and elsewhere.