Nationwide also offers a pay-per-mile plan, called SmartMiles, which is offered in 40 states. Like the Metromile plan, SmartMiles determines a base rate and then adds a cost-per-mile amount. Here too, a device installed in the OBD-II port tracks miles driven.
With this policy, that device also records vehicle speed and other factors. If the policy holder drives with care during the first term, an additional 10 percent discount can be earned. The discount is applied at the next policy renewal and remains in effect while the vehicle is enrolled in SmartMiles.
Usage-based policies, like Farmers Signal, Progressive Snapshot and Geico DriveEasy, track mileage and assess driver behavior to determine rates. In addition to counting miles driven, these policies consider how often you exceed the speed limit, brake hard and accelerate or corner aggressively. Most insurers monitor the driver’s cellphone and penalize those who talk or text while driving.
The policies generally provide a 10 percent discount on sign-up, although some state regulations limit the initial discount to 5 percent. Additional discounts are awarded 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 being driven.
Both pay-per-mile and usage-based insurance policies require allowing your insurance company to monitor vehicle use. The companies maintain that they do not track where drivers are going but rather only distance traveled, and, in the case of usage-based policies, how well the driver behaves behind the wheel.