Pay-by-Mile Car Insurance Introduced By RAC

You may be interested to read that the RAC has recently launched a new fully comprehensive car insurance product that may be suitable for some motorists who drive less than 6,000 miles per annum. It is called Pay-by-Mile car insurance and could save certain motorists some money when compared with conventional motor insurance.

Motorists who are between 21 and 75 years of age, have been resident in the UK for over 5 years, drive fewer than 6,000 miles per annum and have either an iPhone iOS version 13 and above or an Android phone that is a version 8 or above may find this RAC Pay-by-Mile car insurance cheaper than traditional fully comprehensive car insurance.

There is an activation fee of £50 payable plus a Mileage Premium that charges you so much per mile you travel in your car with prices starting from 4p per mile plus a Parked Premium that provides cover during the period when your car is parked. The calculated rates will be based on numerous factors such as where you live, your age, driving experience and what you do for a living.

Many motorists have been travelling fewer miles in their cars over the last year or so due to the pandemic being responsible for more people working from home. Of course, we do not know when, if ever, things will get back to “normality” and people start returning to work in the office. There will no doubt be some employees whose employers allow them to continue working from home on a permanent basis or perhaps spending 2 or 3 days a week working in the office and 2 or 3 days a week working at home.

Motorists taking out this Pay-by-Mile car insurance will need to place a ”drive tag” provided by the RAC in their windscreen that, once paired, tells the Pay-by-Mile smartphone app how many miles the policyholder has travelled. You will need to remember to bring your mobile phone with you in the car.

Policyholders will be charged on a monthly basis. There is no contract so the policy can be cancelled at any point. Motorists are able to monitor how many miles they are travelling.

Pay-by-Mile RAC car insurance also provides cover for things like misfuelling, replacement locks, medical expenses up to £500, personal belongings up to £1,000, windscreen cover, personal accident benefit, uninsured driver promise and foreign travel. The minimum excess is £250.

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