The standard auto insurance policy writes that the customer must pay a premium in increments of monthly, six months, or yearly. However, in the case of the Odometer-based system, the auto insurance company allows the driver to purchase a pre-determined amount of miles for insurance to be covered. This policy is purchased through per-mile rates which are determined by the risk factors that insurance companies normally go through to create a premium.

This system sort of works like buying gallons of gasoline, you pay for miles to drive, except in this case it is with insurance. The insurance of the vehicle will end with the odometer limit is reached that is stated on the insurance card, unless more miles are purchased by the customer. There is no after-the-fact billing by the insurance company and there is no need for the customer to estimate future annual mileage because it is already paid for. Find out more information at Arlington Auto Insurance Guide, you can never learn too much.

photo credit: Marionaire

photo credit: Rockets.