Usage-Based Auto Insurance: Should You Switch to Pay-Per-Mile?
For as long as we’ve been driving, auto insurance has operated on a simple, one-size-fits-all principle. You pay a set premium every six or twelve months, and that price is based on a snapshot of who you are: your age, your driving record, the car you own, and where you live. It’s a reliable system, but it has one major flaw. It doesn’t care if you drive 20,000 miles a year or if your car sits in the garage five days a week. The bill is often the same. In a world where more people are working from home, commuting less, and generally more conscious of their driving habits, this old model can feel outdated and unfair. Why should you pay the same as a long-distance commuter if you only use your car for weekend errands? This question is at the heart of a revolution in the insurance industry, powered by technology: Usage-Based Insurance (UBI). You may have heard it called “pay-per-mile” or seen ads for programs that promise to reward good drivers. It’s a compelling idea, but it also ra...
