In recent years, the automotive insurance sector has undergone important transformations, driven by technology and the search for more personalized solutions. One of the models that has gained prominence is usage-based insurance, also known as pay-per-mile or insurance per kilometer driven.
Unlike traditional insurance, which defines the value of the policy based on fixed criteria, such as age, driver profile and region, usage-based insurance takes into account the distance actually traveled by the driver. This means that those who drive less can pay less.
But is this alternative advantageous for all driver profiles? In this guide, we will explain how per kilometer insurance works, present its main advantages and disadvantages, and show who it is really worth it for. If you are looking for more economical insurance that aligns with your lifestyle, read on!
What is usage-based insurance and how does it work?
THE usage-based insurance is a type of policy that calculates the amount paid by the insured based on the distance traveled with the vehicle. Instead of paying a fixed annual or monthly fee, the driver pays an amount proportional to the number of kilometers driven.
This model generally works with a monthly fixed rate (lower than traditional insurance) plus a value that varies depending on the kilometers driven. For example, an insurance company may charge a fixed R$30 per month plus R$0.10 per kilometer. This calculation is transparent and allows greater control over insurance costs.
In addition to mileage, some insurers that offer this model also use telemetry to analyze driver behavior, such as sudden braking, sudden accelerations and vehicle use times. This data helps to adjust the value of the policy based on the real risk posed by the driver.
This type of insurance has gained popularity among people who work remotely, only use their car on weekends or who live in large cities with good access to public transport. As the insurance value follows the use of the vehicle, it becomes a more economical and fair option for those who drive little.
The main advantages of insurance per kilometer traveled
One of the main advantages of insurance per kilometer driven It’s the economy. Drivers who use their car infrequently, whether because they work from home or prefer alternative means of transportation on a daily basis, tend to pay less than they would with traditional insurance.
Another advantage is the customization, as this model takes into account the driver’s behavior and routine, offering a fairer proposal. Instead of paying the same as someone who drives every day, drivers who drive less are rewarded with lower amounts, reflecting the reduced risk of accidents or claims.
A transparency is also a positive point. Most insurance companies that offer this type of coverage provide platforms or applications, in which the user can monitor their monthly consumption, the mileage traveled and the amount to be paid.
Additionally, many insurance companies are investing in technology to make the customer experience even more practical. From online hiring to real-time monitoring, insurance pay-per-mile fits into the lifestyle of those who value digital, fast and efficient solutions.
Disadvantages and limitations of this insurance model
Despite the advantages, the model also has some disadvantages and limitations that need to be considered before opting for it. One of the main disadvantages is that the cost of insurance can be difficult to predict accurately, as it varies depending on the mileage traveled.
Furthermore, the model pay-per-mile may not be ideal for drivers who travel very short distances or frequently travel to more distant areas. The sum of the monthly fixed rate and the amount charged per kilometer driven may, in some cases, exceed the value of traditional insurance.
Another negative point is that the model requires the use of tracking devices in the vehicle. Although most insurance companies guarantee the privacy of the data collected, there are drivers who are uncomfortable with the idea of having their driving behavior constantly monitored.
Furthermore, not all insurance companies offer this insurance model, which can restrict the driver’s options. In some regions, the offer of this type of coverage is still limited, and not all driver profiles can benefit from its conditions.
For whom is pay-per-mile insurance really worth it?
Per kilometer insurance is especially useful for some driver profiles who do not use their car frequently and are looking for a more economical way of protection. One of the groups that benefit most from this model are people who work from home or have short working hours.
Another group that can enjoy the benefits of this model are urban drivers, especially those who live in large cities with good public transport systems. For those who only use their car in emergency situations or for quick and occasional trips, insurance per kilometer traveled offers a cheaper alternative.
Furthermore, elderly drivers or people with reduced mobility who drive sporadically can also be a target audience for this model. Often, these drivers do not use the vehicle frequently, but they still need insurance coverage for occasional trips.
Finally, drivers who make short or seasonal trips can benefit from this model. If the vehicle is only used during a specific season of the year, usage-based insurance offers a flexible and cost-effective option, allowing the driver to only pay for coverage while using the vehicle.
Conclusion
Usage-based insurance is an interesting and advantageous option for drivers who use their vehicles sporadically or infrequently. This model offers a good balance between cost and benefit, being ideal for specific driver profiles, such as those who live in large cities or work remotely.
However, as we have seen throughout the article, not everyone can benefit from this modality. People who travel long distances or who use the car on frequent trips may find the model less advantageous, as costs may increase as mileage increases.
Before opting for usage-based insurance, it is essential to evaluate your personal needs and check how well your driver profile fits into this model. Carry out a d
