The RAC has introduced a revolutionary new form of insurance for which drivers will now be charged by the mile.
The Pay by Mile initiative helps people over the age of 21 who drive fewer than 6000 miles per year due to the Covid lockdown and other related problems. The Covid pandemic has affected drivers internationally and many cars are being left unused or hardly used at all. It seems unfair to charge drivers a similar amount to “normal” times of use.
The RAC is primarily a breakdown and recovery company in the UK. RAC stands for the Royal Automotive Club.
How much does pay per mile insurance cost?
Every time they drive, they pay 4 pence per mile & when their vehicle is not in use they pay a minimum monthly charge. The initial charge is approximately £50.
Savings could be significant for those who drive a low number of miles, according to the RAC.
Precise per-mile costs are set on a case-by-by-case basis, with four pence quoted as the minimum price per mile.
Drivers monitor insurance fees through RAC’s Pay by Mile program and a device, called a windshield “drive tag,” can tell when a car is in use. To calculate the cost, the tag measures the distance traveled.
Who is the pay per mile insurance covered by?
Pay per Mile insurance is paid monthly and has no cancellation fees. The insurance is sponsored by Highway Company Limited, a subsidiary of LV. The Pay by Mile app is created by the insurance company Wrisk.
The insurance market has been ripe for change for a while now, RAC head of operations Mark Godfrey said “we are excited to make a truly new product available for drivers who don’t use that many miles”.