The short answer is YES! That is, if you drive a little. Many pay-per-mile plans start you with a low rate based on the estimated mileage you think you will travel. After a month or two of reporting to the insurance company, they will adjust your monthly payment or send a bill for the difference if you paid in full for six months.

Most drivers plan to reduce their miles driven, but often forget that exceeding the estimated mileage increases their insurance costs. The shock comes when the payment notice hits their email inbox, and the bill is higher than expected. In other words, you never know your payment until you get it. It’s similar to your electric bill if you are not enrolled in an averaging program. There is a set, fixed amount you pay, and then, depending on the number of lights you keep on or how hot or cold it gets, your electric bill will go up or down.

So, to say mileage-based insurance is better or worse than fixed-price auto insurance is impossible to predict until you have had a few months with that company and get a bill. Then, you can call around to get quotes and compare. The people I talk to have had mixed results. One young man thought it was great at first, but then his friends started inviting him to hang out, and he ended up driving five times the distance he estimated he’d use his car. His first insurance bill from the pay-per-mile company was about $150, which he thought was great. After three months of reporting his mileage through the phone app, his statement was $400. The company was making up for the miles driven during the testing period. His bill then settled at around $330 a month, but varied from month to month. I gave him a fixed rate quote at $180 a month, and it didn’t matter whether he drove one mile or 1,000 miles a month; the price was the same.

I also represent companies that offer mileage and behavioral driving rates, so if you think you might qualify for a discount, please let me know. Please call, text (503-489-3143), or email us if you have questions and want to compare our quote with your mileage-based insurance.