About four out of five Americans have not heard of pay-per-mile car insurance, which could be costing them hundreds of dollars a year in missed savings. From those that have, we’re regularly asked a few common questions. Among them: just how does a pay-per-mile bill work?
No worries — we’ve got a primer for you right here. In future posts, we’ll be tackling some more common pay-per-mile misconceptions,so stay tuned!
Are there mileage caps? Do I buy an amount of miles ahead of time?
Short answer: There are no caps, mileage plans, or prepaid buckets. You’re in control, and you can drive as few or as many miles as you’d like!
Longer answer: Though you might like how your bill looks better if you stick to fewer miles, we don’t impose any mileage caps or maximums. During the sign-up process, we generally offer examples of what kind of bill you can expect based on estimates about your driving habits — but you are not committing to any miles, and your estimates don’t impact your rate.
Instead, think of it like an electric bill. There are no penalties for driving too much, no rollovers, and no limits to keep track of. We offer you a measure of control by billing per-mile, but you only pay for miles you drive.
By the way, you can still go on road trips if you have pay-per-mile car insurance. All miles over 250 miles in a single day (or 150 if you live in New Jersey) are free, so you don’t have to ever worry about blowing up your budget with a long trip.
How does the base rate work?
Our savvier customers may have noticed that not 100% of their bill is made up of the per-mile rates; there’s also a low “base rate” included. While you pay your per-mile rate for miles driven in the previous month, your base rate is forward-looking — that is, you pay it in advance for the month to come.
Here’s how it works: You’ll pay your base rate to sign up. Then, at the end of your first month, you’ll be charged for your mileage from that first month and a base rate for the upcoming second month. Same thing the month after that: a base rate to cover the upcoming month, and a per-mile charge for the month that just passed.
What rates can I expect?
Our billing model is unique, but our rates are personalized based on a variety of factors and the coverage options you select; this will feel really familiar if you’re used to getting a custom rate from another insurer.
That’s it for today. We’ll soon take a look at another common question: how we measure miles driven. Keep an eye out.
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Julianne Sawyer is a freelance writer, app producer, and real-life Metromile customer living in the San Francisco Bay Area.