Is Pay-As-You-Go Auto Insurance Available in the United States?
Last Updated on May 25, 2023
Yes. Pay-as-you-go insurance is picking up speed in the United States, but be careful how fast you go because someone is watching. American drivers are always interested in saving money on car insurance. If you don’t drive often, pay-as-you-go insurance may be an excellent option for maintaining coverage while cutting costs.
How Does Pay-As-You-Go Insurance Work?
This type of insurance works with your personal driving habits to lessen insurance burdens. Additionally, if you drive and avoid violations as well as peak traffic hours and very late at night, you can save more money. But, some are worried that cheap insurance comes at the price of their freedom.
Most pay-as-you-go insurance programs require that a monitor be installed in your car. This is the only way an insurance company can measure how far and often you drive. Some monitors, like Progressive’s, even know how fast you accelerate and break and may charge you more if they think you aren’t driving safely, even if it doesn’t happen often.
Insurance companies claim that monitors aren’t invading your privacy. They’re merely a way to monitor your driving habits, not your conversation or location. But pay-as-you-go insurance has been around in England for longer, and some drivers have found that the system is used for punishment. Of course, you always have the option of leaving the program if it’s not benefiting you, but will the increased premiums continue even after you’ve left the monitoring program?
What Companies and Programs Offer Pay-As-You-Go Insurance?
- Metromile: Metromile charges you a base rate and a per-mile rate, depending on your driving factors. You can save up to 57% on average compared to traditional car insurance. Metromile is available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.
- Hugo: Hugo is a pay-as-you-go car insurance company that offers flexible and affordable coverage for drivers who don’t drive every day. Hugo lets you turn your coverage on and off from your phone, pay only for the days you drive, and avoid down payments and hidden fees. Hugo is currently available in 13 states and backed by SafeAuto or First Acceptance.
- Allstate Milewise: Allstate Milewise deducts your premium from your account each day, based on your miles. You can save about 35% if you drive 5,000 miles a year. Allstate Milewise is available in Delaware, District of Columbia, Florida, Idaho, Illinois, Indiana, Maryland, New Jersey, Ohio, Oregon, Texas, Virginia, Washington, and West Virginia.
- Nationwide SmartRide: Nationwide SmartRide charges you a base rate and a variable rate per mile. You can earn discounts for safe driving and low mileage. Nationwide SmartMiles is available in Alabama, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
- Progressive Snapshot: Progressive Snapshot is a usage-based program that gives you discounts based on how you drive. You can save up to $145 on average after six months. Progressive Snapshot is available in most states.
Is Pay-Per-Go Insurance Worth It?
Pay-as-you-go auto insurance can be worth it for drivers who want to save money and have more control over their coverage. Pay-as-you-go insurance can lower your premiums by charging you based on your actual driving habits, such as how much, how far, or how well you drive. It can also give you the flexibility to turn your coverage on and off depending on your needs. However, pay-as-you-go insurance may not be the best option for drivers who need more coverage options, drive frequently or long distances, or live in states where it is not available.
It may be worth the saving to ask your insurance company whether a pay-as-you-go program is offered. If you’re a good driver, saving money on car insurance is easy. If you’re a bad driver, installing a monitor won’t help your case.