Car Insurance

During the pandemic and at other times, if you drive very little, consider pay-per-mile car insurance to lower your premium. According to the U.S. Department of Transportation, the average American drives about 13,500 miles a year. Insurance companies estimate that a person would likely benefit from pay-per-mile insurance program if they drive less than 8,000 miles annually.

Pay-per-mile insurance may be appropriate for people who work from home, are in college, regularly use public transportation, or who have a second vehicle that is rarely used. This coverage has a base rate, which is determined similar to traditional auto insurance. After that, the per-mile rate is added on. High mileage, aggressive driving, and overnight driving can result in higher auto insurance rates. 

Usage-based insurance programs use telematic technology with an app or in-car device to track your driving. Instead of in-car monitoring systems, some companies require that you submit a photo of your odometer each month.

Another type of usage-based insurance is pay-as-you-drive with rates based on driving habits. With this coverage, rates may increase as a result of bad driving habits. Behaviors that are monitored include hard braking, acceleration and speed, the time of day you drive, mileage, and cellphone use.

For additional information on pay-per-mile car insurance, click here

Teaching Suggestions

• Have students talk with others to learn about their current auto insurance coverage and costs.
• Have students conduct online research for pay-per-mile and pay-as-you-drive auto insurance to obtain additional information on the features, benefits, and drawbacks of these coverages.

Discussion Questions 

1. What features of pay-per-mile car insurance might be appropriate for you or people you know?
2. How might a person reduce the amount paid for auto insurance? 

If you don’t own a car but regularly drive a rental vehicle or another person’s car, consider non-owner car insurance. This coverage provides liability protection to pay for injuries and property damage of others in an accident. Damage to the car you are driving or your injuries are usually not covered. In some states, you may also obtain coverage for uninsured/underinsured motorist protection and medical payment for your injuries. 

Recommended situations for non-owner car insurance include:

• ·         When using a car-sharing service, such as Zipcar or Turo.
• ·         To maintain continuous coverage between selling your car and buying a new one.
• ·         If you frequently rent cars.
• ·        If you frequently borrow other people’s cars, especially if you want a higher level of coverage than that of the vehicle’s owner.
• ·         When obtaining or reinstating a driver’s license, some states require insurance to show “proof of financial responsibility.”

If you frequently borrow a car from someone in your household, non-owner insurance is not recommended.  Instead, you should be included as a covered driver since all driving-age household members may be required to be listed on the policy. If you drive rarely, buy insurance when renting a car or you may be covered on the policy of the person whose car you borrow, if driving with their permission.  

To obtain non-owner car insurance, directly contact an insurance company or agent. Most insurers don’t provide non-owner quotes online. Non-owner car insurance usually has a lower cost than the same liability coverage if you owned a car.

For additional information on non-owner car insurance, click here.

Teaching Suggestions

• Have students contact an insurance agent to obtain rate information for non-owner car insurance.
• Have students create a visual (poster or slide presentation) describing situations in which non-owner car insurance might be appropriate.

Discussion Questions 

1. When might non-owner car insurance be of value to a driver?
2. Describe actions people might take to determine if they have adequate auto insurance coverage.