Given the restrictions on virus blocking and health and safety concerns, most of your automotive usage today can come from grocery stores. Regardless of where you've been going in the past nine months, you've likely driven less than you did before the pandemic, and this pattern could last for many weeks or months. As you drive less, you may be wondering if you can cut back on your auto insurance payments. Here are some ways you can potentially save money. (Always read the fine print when reviewing insurance policies. Some have regulations.)
Pay only for the miles you drive.
Pay-per-mile policies differ from standard auto insurance in that the premium depends on how many miles you drive. Yes, standard policies offer a small mileage discount, but pay-per-mile goes beyond that.
Arizona-based Metromile offers a pay-per-mile policy with a monthly rate starting at $ 29 and an additional charge of 6 cents for every mile driven. The mileage is recorded by a small device that plugs into the vehicle's OBD-II diagnostic port. This is the standard equipment of all light commercial vehicles manufactured since 1996. The connector is easily accessible under the dash, and the insurance company provides the device – the car owner simply plugs it in.
Factors such as the driver's age, credit history, driving history, and insurance history, as well as vehicle type, can all add to monthly payments, and pay-per-mile policies may not be available in your state. Metromile's guidelines are currently only available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.
Nationwide also offers a pay-per-mile plan called SmartMiles, which is offered in 40 states. Like the Metromile plan, SmartMiles determines a base price and then adds an amount per mile. Here, too, a device installed in the OBD-II port tracks the kilometers traveled.
With this guideline, this device also records vehicle speed and other factors. If the policyholder drives carefully during the first term, an additional discount of 10 percent can be granted. The discount will be applied the next time the contract is renewed and remains valid as long as the vehicle is registered with SmartMiles.
Pay for the miles you drive and the way you drive.
Usage-based policies like Farmers Signal, Progressive Snapshot and Geico DriveEasy track mileage and evaluate driver behavior to determine rates. These guidelines not only count the kilometers driven, but also take into account how often you exceed the speed limit, brake hard and accelerate or turn aggressively. Most insurers monitor the driver's cell phone and penalize those who speak or text messages while driving.
The guidelines generally provide a 10 percent discount when you sign up, although some state regulations limit the initial discount to 5 percent. Additional discounts are granted based on the observed driving record. Some usage-based policies also use a device in the OBD-II port to keep an eye on the driver and track mileage. Others use the driver's cellphone, which with its global positioning capability, accelerometer, gyroscope, and magnetometer can determine a lot about the way the car is driven.
Consider the impact on data protection.
For both pay-per-mile and usage-based insurance policies, your insurance company must be able to monitor vehicle usage. The companies claim that they don't track where drivers are going, just the distance traveled and, with usage-based guidelines, how well the driver is behaving behind the wheel.
However, the data includes the location of the vehicle and much more. If you let your insurer ride with you, there is a compromise: you get a discount but you sacrifice privacy.
Stay and save with your current policy.
If buying a new insurance policy is causing a headache, there are other ways to save. Do you expect to continue driving infrequently? You can qualify for a low mileage discount on a standard policy. You may be asked to check the mileage when you speak to your agent. Maintenance records can help. If you increase your deductible, your premium will also decrease.