For many drivers, that means far fewer miles on the odometer, but they’re still paying for insurance plans built for heavy commuting. Instead of charging a flat rate based on estimated annual mileage, the insurer bills for the miles you actually drive. How pay-per-mile insurance worksTraditional car insurance sets premiums based partly on estimated annual mileage. Programs vary in how they track mileage, apply daily caps, and award discounts. However, the data collection involved means it’s worth choosing a provider that’s upfront about how your information will be used.