Prepaid Car Insurance: Prepaying for Your Car Insurance

The average base prepaid car insurance rates are $20/month. You'll be charged more in addition to the base rate for each mile you drive. Learn all about pay as you go car insurance (also called pay as you drive car insurance) to get the best prepaid car insurance rates online today!

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

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Reviewed byJoel Ohman
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UPDATED: Jul 27, 2020

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Here's what you need to know...
  • Pay by the mile prepaid auto insurance was first approved in Texas
  • This kind of pay as you go car insurance allows you to pay only for the miles you drive
  • Paying for each mile encourages people to bike or walk as an alternative


Prepaid car insurance is an interesting idea that is becoming more popular. One of the most interesting companies that offers prepaid car insurance sells its insurance policies by the mile.

This form of insurance offers people that do not drive that much a great way to save money on car insurance by letting them buy exactly as much coverage as they need.

Just enter your ZIP into the FREE tool located above to compare cheap prepaid car insurance rates today!

The Company that Offers Pay by the Mile Car Insurance

Currently, there is mainly one company that is offering this innovative form of prepaid car insurance. This company is MileMeter Insurance located in Texas. Read the MileMeter Insurance review here.

The reason this company is only operating in Texas is because Texas is currently the only state that has passed a law allowing car insurance to be sold per mile.

This law was passed in 2001 and in the past decade, MileMeter Insurance has seen significant growth.

The popularity of pay by the mile car insurance combined with having a significant amount of capital and reinsurance has made MileMeter a great success.

Another reason MileMeter is so successful is that MileMeter does not require the driver to have a GPS or other tracking device in their car to determine how many miles have been driven.

MileMeter also does not require a credit check or Social Security number to get this type of insurance.

MileMeter prides itself on operating differently than more conventional car insurance providers.

Unlike many car insurance companies MileMeter does not charge more for one policyholder than another based on gender or age.

MileMeter is hoping that other states pass similar laws to Texas so the company can offer this type of insurance in other states.

On the company website, there is a special page to submit your information to be notified if and when MileMeter is available in your state.

This page also gives tips on how to bring prepaid car insurance to the attention of other people in their state.

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How Pay-by-the-Mile Car Insurance Works

With MileMeter Insurance, a policyholder has coverage for six months at a time.

With a traditional car insurance policy the policyholder would pay for individual forms of coverage; with MileMeter they pay for a certain amount of miles.

This system works great for people that do not typically drive a lot such as:

  • People who are in college
  • People that work from home
  • Those who are retired and do not have a daily commute
  • People that live in an area that has travel options like walking and public transportation

The policyholder can buy between four thousand and six thousand miles for the six-month policy period.

The policyholder can purchase extra miles at any time, which comes in handy if something unexpected comes up that requires a lot of driving or if they are planning a vacation.

If a policyholder does not use all of their purchased miles in the six-month period, the remaining miles will be credited to the renewed policy for the next six months, less 1,000 miles.

When someone first signs up for MileMeter they must submit a photo of their car’s odometer to determine the car’s initial mileage.

Throughout the policy period and when the policy is renewed the company will request another photo of the odometer to make sure that the number of miles that have been driven over the policy period matches up with the reported total.

As a way to make this process simpler, MileMeter allows these photos to be uploaded via the policyholder section of its website.

The Long-Term Benefits of Pay-by-the-Mile Insurance

Pay-by-the-mile car insurance causes policyholders to always be aware of just how much they are driving.

As a result of this awareness, the policyholder might decide to walk or take a bicycle when traveling short distances, whereas before they would have driven their car.

So not only does this type of insurance offer the policyholder the opportunity to save money, but the opportunity to help save the environment as well.

To easily compare car insurance rates today just type your ZIP in the box above now!

References:

  1. https://www.metromile.com/
  2. http://ambest.com
  3. http://www.tdi.texas.gov/pubs/consumer/cb020.html
  4. http://www.businesswire.com/news/home/20081114005115/en/MileMeter—Nation-Offer-Auto-Insurance-B…
  5. http://settlement.org/ontario/housing/living-in-ontario/green-living/what-are-the-environmental-b…

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