Pay-as-you-go car insurance calculates a policyholder’s premium based on how many miles they drive each month. The policyholder’s mileage is tracked through a mobile app or device plugged into the vehicle, and customers who drive fewer miles pay a lower rate. Companies that offer pay-as-you-go car insurance, which can also be referred to as pay-per-mile or usage-based coverage, usually charge a monthly base rate and then add a fee for each mile driven.
Other major insurers offer usage-based programs that give drivers a discounted rate based on various driving habits, including miles driven. If your annual mileage is lower than the average driver, you may also qualify for a low-mileage discount.
Who Should Consider Pay-as-You-Go Car Insurance
Pay-as-you-go car insurance is often a good investment for people who don’t drive frequently, like students and seasonal workers. To learn more, check out WalletHub’s guide to usage-based insurance.
Allstate Drivewise is a usage-based insurance program that tracks drivers with a mobile app and rewards them with rewards and a semi-annual rebate for safe driving habits. The Allstate Drivewise app tracks three main driving characteristics: safe speed (under 80 mph), braking (minimal abrupt stops) and time of day (limited late-night trips).… read full answer
Allstate Drivewise - Key Features
Factors for Calculating Pricing
Time of Day
Drivers get rebates every six months based on driving behavior.
Drivewise tracks unsafe behavior, such as hard braking and high-speed driving.
You can use a smartphone app.
You can use an OBD connected device.
All states except CA
How Allstate Drivewise Works
Allstate Drivewise works by tracking drivers’ habits through the Allstate mobile app. Users do not have to take any action to log trips on the app. Your phone just needs to be charged to at least 25% and have location services enabled in order for your trip to be detected. Once you’ve traveled at least 20 mph for a short distance, the app will begin tracking you.
However, if you’re a passenger in a moving vehicle and not the driver, you will have to either delete the trip from the app or put the app into “sleep” mode for the duration of your trip.
Drivewise does not affect premiums directly, instead offering cash rebates to drivers based on their performance. So if you practice unsafe driving habits while using Drivewise, your rates won’t go up. But drivers who practice good habits can expect to earn lucrative rewards.
Allstate Drivewise Rewards
If you’re a current Allstate customer, you can earn up to 10% of your premium in cash back rewards just for signing up. Depending on your driving habits, you can earn up to 25% cash back every six months by using the program.
Drivewise also allows users to earn Allstate Rewards points, which can be redeemed for daily deals, gift cards, sweepstakes, and more. Even if you’re not an Allstate customer, you can still sign up for Drivewise in order to earn points. Drivers earn 10,000 points after signing up, and can earn bonus points for completing safe driving challenges such as going three consecutive days with no high speeds or sudden braking.
How to Sign Up For Allstate Drivewise
To sign up for Drivewise, the primary policyholder needs to download the Allstate mobile app on their smartphone and activate the program. Then, additional drivers on the policy who want to use Drivewise can download the app and enter an activation code.
Drivers who aren’t Allstate customers can also create an account on the app in order to earn rewards.
Paying off your car may affect your insurance coverage requirements. However, paying off your car does not directly affect your auto insurance rate.
The presence of a car loan, no matter how much you owe, doesn’t mean you’ll automatically pay a higher insurance rate, as listing a financial company as a payee on your policy won’t affect your rate. However, having a car loan will almost certainly mean that you’ll have to carry more insurance than your home state’s minimum requirements. Banks that back auto financing loans almost always stipulate that their customers carry more coverage than is required by law – such as additional liability insurance as well as … read full answercomprehensive, collision, and/or lease/loan payoff coverage – to protect the bank’s interest in the car. Also, customers who finance vehicles are sometimes required to carry insurance policies that have lower deductibles, which makes their premium more expensive.
Once you have paid off your car loan, and you own the vehicle outright, the company that financed your car doesn’t have a say in what type of insurance coverage you must have any longer, and you can shop around for different options. Dropping certain types of coverage or lowering the limits on your policy could get you a lower premium.
So, paying off your car could allow you to pay less for insurance, but you won’t see it as an automatic rate decrease on your policy. If you have paid off your car and want to make changes to your coverage options, call your insurance provider as soon as possible.
Yes, mileage affects insurance because it is one of several personal characteristics that insurers take into account when determining premiums. Insurance companies consider factors like the driver’s age, driving record, location, and average mileage to estimate how much risk they present. Specifically, drivers who spend less time on the road are less likely to be in an accident, so they are usually charged lower rates.… read full answer
Even though you won’t change your vehicle usage just for car insurance, there are still ways to reduce your premium by taking control of other factors that insurers consider. For example, improving your auto insurance score and driving record will help your premium in the long run. To learn more, check out WalletHub’s guide to the factors that affect car insurance rates.
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