Auto Insurance

Pay-Per-Mile Insurance

Auto insurance where you pay a low base rate plus a per-mile charge — ideal for low-mileage drivers.

Last reviewed: May 2026 · Editorial methodology

Definition

Pay-per-mile insurance charges a fixed monthly base rate (typically $20–$50) plus a variable per-mile rate (usually 2–8 cents per mile). A driver covering 4,000 miles per year could pay $500–$800 annually compared to $1,500+ for a traditional policy. Leading providers include Metromile (now part of Lemonade), Milewise by Allstate, and SmartMiles by Nationwide. Pay-per-mile is especially attractive for electric vehicle owners, retirees, and remote workers who drive infrequently. The per-mile rate is typically measured via a small plug-in device; daily mileage caps (often 150–250 miles) protect against unusually long trips.

Where this term matters

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Tip

Glossary definitions are educational. Always check your own policy language — insurers can define common terms differently from one another. When in doubt, request a written explanation from your agent.

Related terms

Usage-Based Insurance (UBI)Auto insurance priced based on actual driving behavior and miles — a broad category including telematics and pay-per-mile.Telematics InsuranceInsurance that uses in-car devices or smartphone apps to track driving behavior and personalize premiums.PremiumThe amount you pay for insurance coverage — monthly, quarterly, semi-annually, or annually.

Related guides

Source: Cover Forge USA editorial team|Last verified: May 2026|Methodology
Definitions are educational and may be simplified. Always refer to your policy contract and consult a licensed agent for terms that affect coverage decisions.
CF

Cover Forge USA Editorial Team

Editorial Lead

This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.

Reviewed June 2026

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