Progressive and Geico have simultaneously launched nationwide pay-per-mile auto insurance plans following successful pilot programs in 12 states, offering drivers who travel fewer than 10,000 miles annually savings of up to 40%.
How It Works
Both programs use a small OBD-II device or smartphone app to track miles driven, charging a base rate plus a per-mile fee typically ranging from 3 to 7 cents per mile.
- Average savings of $720/year for drivers under 8,000 miles annually
- Remote workers and retirees are primary target demographics
- Real-time mileage tracking with monthly billing adjustments
- No penalty for high-mileage months — just proportional pricing
Market Disruption
The usage-based model challenges traditional annual premium structures. Industry analysts predict that pay-per-mile plans could capture 15% of the personal auto insurance market within three years as remote work continues to reduce commuting miles.
