Vocabulary
Glossary
Definitions written for drivers considering pay-per-mile or telematics pricing, especially low-mileage households. Each term links back to the guides where it matters.
- Annual mileage
- Miles driven per year, a rating factor on every policy and the basis of pay-per-mile pricing. The national average is roughly 12,000–13,000.
- Base rate (pay-per-mile)
- The fixed monthly portion of a pay-per-mile premium, covering risks that exist while the car is parked and the policy's fixed costs.
- Connected-car data
- Driving data transmitted by a vehicle's built-in connectivity and shared with an insurer with the owner's consent.
- Driving score
- A telematics programme's rating of your driving from braking, acceleration, speed, phone handling and time of day, used to set discounts or rates.
- Low-mileage discount
- A conventional-policy discount, typically 5–15%, for declaring annual mileage below a threshold.
- OBD-II device
- A small unit plugged into a vehicle's on-board diagnostics port that records mileage and, in some programmes, driving behaviour.
- Pay-per-mile insurance
- A policy priced as a monthly base rate plus a per-mile charge for miles actually driven, measured by a device or app.
- Per-mile rate
- The charge for each mile driven on a pay-per-mile policy, typically 3–12 cents, subject to a daily cap.
- Telematics (usage-based insurance)
- Pricing that uses measured driving data—mileage, braking, speed, time of day, phone use—collected by a device, connected car or app.