For the longest time, rates for auto insurance were determined by your risks and what kind of vehicle you drove. However, many auto insurance companies are trying to find a more efficient way to insure drivers and their vehicles. Pay-per-mile auto insurance is how they are doing it, but many drivers are not aware of how this insurance works. In general, this form of auto insurance allows you to pay a lower cost if you do not really drive your vehicle all that much. Is this a good way to save money on auto insurance? Here is a look at some of the things to consider before making the change.
Have you actually measured how many miles you drive per month?
You may have a general idea of how far your drive on a month, but few people ever really measure how many miles they drive. For typical people, the numbers will be fairly consistent from month-to-month. Before you decide on pay-per-mile auto insurance, take the time to check your numbers. You may be surprised at just how much you do drive and this can help you determine if this form of auto insurance would actually help you save.
Are there certain times of the year when you drive your vehicle more?
Some people drive more at certain times of the year than others. For example, if you drive your kids back and forth to school through the fall, winter, and spring but really don't get out much in the summer, it could be worth switching to pay-per-mile for the summer and then opting for a traditional policy the rest of the year, and this could save you some money. If you forget to make the change when your mileage goes up, however, you could actually pay more for per-mile coverage than what you would for a traditional car insurance policy.
Would you still be considered an at-risk driver?
If you are considered an at-risk or high-risk driver, making the change to pay-per-mile auto insurance may not help you all that much. Your rates per mile can still be higher, and that can mean you will end up paying about the same no matter how much you drive. You could be considered at-risk or high-risk if you have had a lot of prior accidents, are a certain age, or even drive a certain vehicle, your premiums per-mile will be higher.
Talk to a company like Illinois Insurance Center Inc for more information about auto insurance.Share