Pay Less When You Drive Less

Pay Less When You Drive Less

Is your car spending more time in the garage than on the road? You may be able to reduce your auto insurance payments.

Given the constraints of virus lockdowns and worries over health and safety, the bulk of your automobile use may be from grocery-store runs these days. Regardless of where you have gone in the past nine months, you’ve probably driven less than you did pre-pandemic, and that pattern could continue for many weeks or months to come. With reduced driving, you may be wondering if you can reduce your auto insurance payments. Here are some ways you can potentially save money. (But when reviewing insurance policies, always read the fine print. Some come with stipulations.)
Pay only for the miles you drive.

Pay-per-mile policies differ from standard auto insurance in that the premium is based on how many miles you drive. Yes, standard policies offer a low-mileage discount, but pay-per-mile goes beyond that.

The Arizona company Metromile offers a pay-per-mile policy with a monthly rate starting at $29 and an additional charge of 6 cents for each mile driven. Mileage is tracked by a small device that plugs into the car’s OBD-II diagnostic port, which is standard equipment on all light-duty vehicles produced since 1996. The port is easily accessible under the dashboard, and the insurance company provides the device — the car owner simply plugs it in.

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Pay Less When You Drive Less

Factors including the driver’s age, credit history, driving record and prior insurance history, as well as the vehicle type, can increase the monthly payments and pay-per-mile policies may not be available in your state. Metromile’s policy is currently available only in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington.

Nationwide also offers a pay-per-mile plan, called SmartMiles, which is offered in 40 states. Like the Metromile plan, SmartMiles determines a base rate and then adds a cost-per-mile amount. Here too, a device installed in the OBD-II port tracks miles driven.

With this policy, that device also records vehicle speed and other factors. If the policy holder drives with care during the first term, an additional 10 percent discount can be earned. The discount is applied at the next policy renewal and remains in effect while the vehicle is enrolled in SmartMiles.
Pay for the miles you drive and how you drive.

Usage-based policies, like Farmers Signal, Progressive Snapshot and Geico DriveEasy, track mileage and assess driver behavior to determine rates. In addition to counting miles driven, these policies consider how often you exceed the speed limit, brake hard and accelerate or corner aggressively. Most insurers monitor the driver’s cellphone and penalize those who talk or text while driving.