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What Is A Pay-As-You-Go Car Insurance? Know Why It Is A Cheaper Option

Last Updated on May 14, 2024 by admin

The cost of car coverage depends on the number of miles that you will drive. The less you will drive the better. Thus, car mileage is a vital factor in the calculation of coverage cost. Of course, there are several other factors which can also affect the total cost of car coverage. But if you drive less miles through the term the coverage cost will come down in a big way. But you need to look for insurers that provide such car coverage. This is due to the fact that not all companies may offer you miles based coverage for cars.

Pay-as-you-go auto insurance is one such option that you can buy. It will cost much less than a term coverage. You can find some insurers that offer such type of car covers. But it could be hard to find them on your own. However, the internet is the best place to get information about companies which provide car coverage on the basis of miles that you drive. So, if you need to drive only on few occasions then you can look for such insurers. Many people may not drive your cars every day. If you are one of those then this might be a good option.

A pay-as-you-go car coverage can save you lot of money. Coverage for cars is expensive these days. And the cost is on the rise each passing day. So, when you don’t need to drive every day you should look for cheaper car coverage options

Alias Insurance can assist you to get and compare the best as well as the cheapest free quotes online. Our online comparison tool can make shopping easy for you. Just use it to see how much you will save on your pay-as-you-go car coverage quote! To get started, apply now!

How Does The Best Cheap Pay As You Go Car Insurance Policy Actually Work?

In a pay as u go car insurance, your insurer will install a small mileage tracking device. It helps the car insurer to know the number of miles that you drive each day. The device will record your car mileage and it will also let the insurer see your driving habits.   

This will include things like:

  1. How many miles you drive everyday
  2. What is the speed at which drive the car
  3. How do you apply brakes when driving the car?
  4. When do you drive the car?

The device installed in the car will send all the data to the insurer.

Car coverage rates will be high if you drive more miles every day. This is due to the fact that it will pose more risks to the insurer. But if you drive less miles with good driving habits, the rates will be low. Thus, the main benefit of getting this type of a car policy is that it allows you to check your data online. So, you can improve your driving in the areas that need corrective action. This might help you to get the lowest car coverage rates later on. Insurers take note of all such things while calculating the rates.   

However, to find the best coverage at the cheapest rates you need to shop. And that is a hard task. You need to make sure that the coverage level is sufficient.  Online shopping will save you a lot of time and money. Our online comparison tool will provide you details of the latest rates and coverage extent. Hence, take advantage of our online services to see how much money you can save on your pay-as-you-go car coverage quote. With all information at your finger tips, you can make an informed decision on your purchase. Act to get benefitted today! 

When Should You Think Of Buying A Pay-As-You-Drive Car Insurance Cover?

List Of Pay-As- You-Go Car Insurance Companies And See What You Can Save

Not all companies offer pay-as-you-go car coverage. You can get this type of coverage for cars from only those insurers that provide usage based car policies. Some of them are as under:

  • Metromile – The Company provides pay-how-you-drive car coverage program in some states. You will have to check if it is available in your state. You can contact us online today!
  • Mile Auto – It offers pay-as-you-go car coverage. The Company installs an odometer app in cars. The cost includes base rate plus the number of miles that you will drive.
  • Nationwide – Pay-as-you-go car coverage is provided through the SmartRide program with safe driving discount. It is available in as many as 40 states. The coverage level is the same as that offered by a term car policy.
  • Allstate – The Company provides pay-as-you-go car coverage program in 12 States. Just find out if you can get such coverage in your state. We are there to help you! Use our online services now!
  • Root Insurance Company – It can offer you a usage based car policy on the basis of how you drive. So, to be eligible for such coverage, you need to take test drive for 2-3 weeks. A mobile app will be fitted in your car for this purpose.
  • Progressive – The Company provides a Snapshot program to insure cars on the basis of mileage. But the coverage rates are based on drivers’ driving habits. For this, the insurer has an app or installs a device in the car for which coverage is sought. The trial period is for 30 days and then your car may be covered.
  • Esurance – The Company’s DriveSense program is a pay-as-you-go car coverage plan. It is available in 18 states at present. A mobile app or plug-in device will be used to keep track of your driving habits.
  • Safeco – This company’s RigthTrack program provides pay-as-you-go car coverage to qualified drivers. The insurer also offers discount to drivers that drive cars at speeds less than 80 mph.
  • Travelers – The Company offers pay-as-you-go car coverage through its IntelliDrive program. Your driving habits will be tracked with a mobile app. You can get up to 20% discount if you are found to be a safe driver on road.
  • State Farm – The Company provides Drive Safe program which is pay-as-you-go car coverage, You can save up to 30% on your cost.

Here Are Your Cheap Pay-As-You-Go Monthly Car Insurance Options In Brief

The 3 varied types of pay-as-you-go car policies that you can get are: 

  • Pay-per-mile car coverage – It is the commonly provided car policy based on car mileage. You can buy this type of car coverage if your car mileage throughout the year is less. In a pay-per-mile car cover, you can enter into a rolling contract with an insurer and pay premium every month based on how many miles you will drive. Coverage cost will be the lowest if you drive less.
  • Pay-how-you-drive car cover – This is the best option for new drivers. In this type of a car policy, the insurer will track the number of miles which you will drive through a device. This way your driving habits will also get monitored. Thus, it will be basically a Telematics or black box type of car policy. The car coverage cost will depend on both these factors.
  • Pay-per-hour/Pay-per-day car cover – You can also get car coverage on an hourly or daily basis. It will be particularly helpful when you drive someone else’s car. You may also find it useful if someone else drives your car for few hours, days or even weeks.

Alias Insurance can help you to get the best and the cheapest free quotes for all the aforesaid options. You can check if you will be able to get a quote with a discount. Use our easy online comparison tool to learn more about what options you have to save money on your car coverage.  

Here Are 5 Important FAQs

How does Pay-As-You-Go car insurance work, and how is it different from traditional plans?

Pay-As-You-Go car insurance operates on a mileage-driven model. Instead of a fixed premium, your costs are based on the actual miles you drive. Telematics devices or mobile apps track your mileage and driving behavior, offering a more personalized and cost-effective approach compared to traditional plans.

Who benefits the most from Pay-As-You-Go car insurance?

Pay-As-You-Go insurance is ideal for drivers with low annual mileage, occasional drivers, or those who rely on public transportation. If you don’t use your vehicle frequently, this flexible option allows you to pay only for the miles you drive, potentially saving you money on insurance premiums.

What specific data do telematics devices track in Pay-As-You-Go plans?

Telematics devices monitor various driving behaviors, including mileage, speed, braking patterns, and the time of day you drive. This data helps insurers assess risk more accurately, allowing for a customized insurance premium based on your individual driving habits.

Can I switch from a traditional auto insurance plan to Pay-As-You-Go coverage mid-policy?

Yes, many insurers allow policyholders to switch from traditional plans to Pay-As-You-Go coverage, even mid-policy. The process may involve installing a telematics device or using a mobile app to track your driving habits. Before making the switch, consult with your insurer to understand the terms, conditions, and potential impacts on your premium for a smooth transition.

About The Author

Andy Walker is a freelance content writer who specializes in writing for insurance and finance related niches. He has years of experience in this field and has written extensively on a variety of topics. Andy’s work is always highly polished and well-researched, ensuring that his clients are always happy with the results.

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