Esurance Pay Per Mile Car Insurance Review

Auto Insurance, Insurance
Esurance Pay Per Mile Car Insurance Review

Esurance has launched a “Pay Per Mile” auto insurance option specifically targeting people who drive less than 10,000 miles per year.

Someone who drives less than 6,000 miles per year could save an average of 25% to 30% compared to a regular auto insurance policy, according to Eric Madia, vice president of auto product at Esurance.

Pay Per Mile is available only in Oregon, but Esurance is considering rolling it out in other states soon. Policies offer all the same coverage options as standard auto insurance, including liability, comprehensive and collision coverage.

The new product empowers customers, Madia says. “You’re going to pay a low monthly base. Beyond that, it’s pretty much up to you to decide how much your insurance is going to cost.”

If you live in Oregon and don’t drive much — or want a reason to cut down on your driving — Pay Per Mile and its competitors are worth a look.

[Low-mileage driver? Comparison shopping can save you hundreds of dollars. Find low rates with NerdWallet’s Car Insurance Comparison Tool.]

How Esurance Pay Per Mile works

Pay Per Mile charges a base rate, plus a per-mile rate for up to 150 miles a day. Additional miles are free. According to the company, the per-mile rate is “usually just a few cents.”

If you sign up for Pay Per Mile, Esurance will track your mileage using a device that plugs into your car’s diagnostic port and transmits data back to the company. You’ll receive a monthly bill reflecting your base rate plus your mileage charges.

The program isn’t open to vehicles built before 1996 or electric or hybrid vehicles, all of which typically lack the necessary diagnostic port.

You can view your driving data online or on Esurance’s smartphone app.

Will Esurance Pay Per Mile save you money?

Pay Per Mile’s costs vary based on the driver (or drivers) and the vehicle, so to find out if the program will save you money, you’ll have to get a quote from Esurance. Then you can estimate your monthly or annual premium based on the number of miles you expect to drive, and compare that to a quote for standard car insurance coverage.

Both Esurance’s base rate and per-mile rate depend on such factors as your age, gender, driving record and credit history (where allowed by law), as well as your car’s make, model and year — all of which are also taken into account by traditional auto insurance policies.

Customers who cancel Pay Per Mile must pay a $50 fee unless they switch to a standard Esurance policy.

Low-mileage drivers have insurance choices

Esurance’s Pay Per Mile competes with Metromile, which offers mileage-based insurance in Oregon, California, Illinois, Pennsylvania, Virginia and Washington.

If you don’t drive much, usage-based auto insurance programs are another option that could save you money. In addition to miles driven, these programs set prices based on factors such as when you drive and how hard you brake or accelerate. Your rate is set during each policy period, with any discounts applied in the next period. Choices include:

If you’re a low-mileage driver in Oregon, you should at least get quotes from Esurance Pay Per Mile and Metromile and compare them with your standard car insurance premium. If you consider yourself a safe driver, you should also look into the discounts usage-based programs offer.

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Aubrey Cohen is a staff writer at NerdWallet, a personal finance website. Email: acohen@nerdwallet.com. Twitter: @aubreycohen.


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