Is pay as you go auto insurance available in the United States?

Last Updated on March 28, 2018

Police in rear view of car.

Friend or foe? Pay as you go insurance requires driving habits being monitored.

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 and if you don’t drive often, pay as you go insurance may be a great option for maintaining coverage while cutting costs.

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 the cost of 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 knows 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 that 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 a longer period of time 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?

That question has yet to be answered, but it may be worth the saving to ask your insurance company whether a pay as you go program is offered. Saving money on car insurance is easy to do if you’re a good driver. If you’re a bad driver, installing a monitor probably won’t help your case.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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