Pay-as-you-go car insurance, also known as usage-based insurance (UBI) or pay-per-mile insurance, has become a popular option for drivers seeking flexibility and affordability. However, its availability and features vary significantly from state to state due to differences in insurance regulations, infrastructure, and provider coverage. Understanding what’s offered in your state is essential to determine if this type of insurance is right for you.
This guide provides a state-by-state overview of pay-as-you-go car insurance availability in the USA, highlighting key providers, regulations, and any state-specific considerations.
How Pay-As-You-Go Insurance Works
Pay-as-you-go car insurance charges premiums based on:
- Base Rate: Covers administrative costs and minimum liability coverage.
- Variable Rate: Charges based on miles driven, often tracked via telematics or mobile apps.
This model is ideal for low-mileage drivers, urban residents, and those seeking more control over their insurance costs.
States With Widespread Availability
California
- Key Providers: Metromile, Allstate Milewise, Nationwide SmartMiles.
- Highlights:
- California has strict regulations on data privacy, so telematics use is highly monitored.
- Popular due to large urban centers and a significant number of low-mileage drivers.
Texas
- Key Providers: Nationwide SmartMiles, Root Insurance, Progressive Snapshot.
- Highlights:
- Coverage is widely available, with competitive rates for safe drivers.
- Many rural drivers benefit from per-mile models due to infrequent long-distance travel.
Florida
- Key Providers: Allstate Milewise, State Farm Drive Safe & Save, Nationwide SmartMiles.
- Highlights:
- High availability, especially in urban areas like Miami and Orlando.
- Popular with retirees and seasonal drivers who spend part of the year in other states.
Illinois
- Key Providers: Metromile, Allstate Milewise, Nationwide SmartMiles.
- Highlights:
- Highly competitive market for usage-based insurance.
- Chicago residents benefit from per-mile pricing due to reliance on public transportation.
New York
- Key Providers: Nationwide SmartMiles, Allstate Milewise, State Farm Drive Safe & Save.
- Highlights:
- Coverage is available, but higher base rates due to dense urban driving.
- Ideal for residents of upstate New York with lower mileage.
Washington
- Key Providers: Metromile, Progressive Snapshot, Nationwide SmartMiles.
- Highlights:
- Urban centers like Seattle see strong adoption due to traffic congestion and reliance on alternative transportation.
States With Moderate Availability
Michigan
- Key Providers: Root Insurance, Nationwide SmartMiles, Progressive Snapshot.
- Highlights:
- No-fault insurance laws make pay-as-you-go policies slightly more expensive.
- Safe driving behavior is heavily rewarded.
Arizona
- Key Providers: Metromile, Allstate Milewise, Root Insurance.
- Highlights:
- Popular with snowbirds and seasonal residents.
- Providers often cater to low-mileage drivers in urban areas like Phoenix.
Colorado
- Key Providers: Nationwide SmartMiles, Progressive Snapshot, State Farm Drive Safe & Save.
- Highlights:
- Mountain driving risk factors are considered, but low-mileage drivers can save significantly.
- Increasing availability in urban areas like Denver.
Nevada
- Key Providers: Metromile, Progressive Snapshot, Allstate Milewise.
- Highlights:
- Widely available in cities like Las Vegas but less common in rural areas.
- High base rates can offset per-mile savings.
Pennsylvania
- Key Providers: Nationwide SmartMiles, State Farm Drive Safe & Save.
- Highlights:
- Competitive options in both rural and urban areas.
- Discounts for good driving behavior.
States With Limited Availability
Alaska
- Key Providers: Progressive Snapshot.
- Highlights:
- Limited coverage due to sparse population and challenging driving conditions.
- Per-mile models are less common.
Hawaii
- Key Providers: Root Insurance, Progressive Snapshot.
- Highlights:
- Limited to a few providers due to smaller insurance market.
- Ideal for residents who drive infrequently on the islands.
North Dakota
- Key Providers: State Farm Drive Safe & Save.
- Highlights:
- Limited availability due to low population density.
- Best suited for rural drivers with predictable mileage.
South Dakota
- Key Providers: Progressive Snapshot.
- Highlights:
- Few providers, but low-mileage drivers can still find savings.
- Limited to major cities and towns.
Wyoming
- Key Providers: State Farm Drive Safe & Save.
- Highlights:
- Sparse coverage due to rural population and long travel distances.
- Limited options for per-mile savings.
Special Considerations by State
States With No-Fault Insurance Laws
- Examples: Florida, Michigan, New York.
- Impact:
- Pay-as-you-go policies may include higher base rates due to required personal injury protection (PIP).
- Savings depend on driving behavior and mileage.
States With Strict Privacy Laws
- Examples: California, Vermont.
- Impact:
- Telematics providers must comply with stringent data privacy regulations.
- Drivers can often opt out of behavior tracking while still using mileage-based pricing.
States With High Insurance Costs
- Examples: New Jersey, Louisiana.
- Impact:
- Base rates for pay-as-you-go policies may be higher than average.
- Significant savings are still possible for low-mileage and safe drivers.
How to Find Pay-As-You-Go Insurance in Your State
- Research Providers:
- Check major providers like Metromile, Nationwide, and Allstate for availability in your area.
- Look for smaller regional insurers offering usage-based policies.
- Understand State Requirements:
- Ensure the policy meets your state’s minimum liability insurance requirements.
- Check if additional coverages (e.g., PIP) are mandated in your state.
- Compare Quotes:
- Use online tools or contact providers directly to compare base rates, per-mile costs, and discounts.
- Review Discounts:
- Ask about low-mileage discounts, good driver rewards, and bundling options.
- Evaluate Driving Habits:
- Determine if your mileage and behavior are compatible with pay-as-you-go savings.
Conclusion
Pay-as-you-go car insurance is available in most states, but the level of coverage and provider options vary. States with larger urban populations and a high number of low-mileage drivers, such as California, Texas, and Illinois, tend to offer more options and competitive rates. Meanwhile, rural states like Wyoming and North Dakota have limited availability but can still provide savings for specific driving patterns.
Before committing to a pay-as-you-go policy, research your state’s regulations and compare providers to find the best option for your needs. By tailoring your insurance to your driving habits, you can enjoy significant savings and greater flexibility.
