Best car insurance for low-mileage drivers

Gas prices reached their highest levels in four years in late April, two months after the start of the Iran war.

The average cost of a gallon of regular gas rose to $4.39 on May 29, according to AAA. That's prompted some car owners to change their habits and drive less. But gas isn't the only uncomfortably high price car owners are facing right now: The average American driver spends $1,163 on a 6-month car insurance policy, according to data from the insurance comparison site The Zebra.

If you're driving less now —whether it's because you're trying to save money, work from home, or are retired —finding car insurance that fits your budget and your lifestyle is important. Several types of policies can help low-mileage drivers reduce their costs, including pay-per-mile car insurance and usage-based insurance, also called telematics programs.

Here's what you need to know about car insurance for low-mileage drivers, including our top policy picks for those who don't spend much time behind the wheel. (See our methodology for more on how we made our selections.)

Who's this for? Most pay-per-mile car insurance plans require you to run an app on your phone when you drive or install a device in your car that tracks your mileage and driving information. Mile Auto doesn't use those methods and instead asks drivers to snap a picture of their odometer and upload it once a month.

Standout benefits: Mile Auto offers full coverage car insurance, so you'd also be covered if your car is damaged by something other than a collision.

Who's this for? On top of already affordable rates for drivers with lower mileage, Geico's DriveEasy program can help you earn a discount when you renew your policy, based on factors including low mileage.

Standout benefits: Geico also offers discounts if you're a member of one of the more than 800 participating alumni groups and professional organizations.

Who's this for? Nationwide's SmartRide program offers discounts of up to 40% to safe drivers who enroll and install the app on a smartphone. The program tracks your mileage, braking and acceleration, idle time and nighttime driving to help you earn discounts at your next policy renewal.

Standout benefits: Nationwide won't use your data to raise your rates after you participate in the program.

Who's this for? If you pay more for bus or train tickets than parking, Lemonade might be a great fit. Lemonade's auto insurance is only available in 10 states, but that footprint covers cities like Chicago, Los Angeles, San Francisco, Phoenix, Dallas, Seattle, Houston and Portland, to name a few.

Standout benefits: If you rent an apartment or own a home, consider bundling other insurance policies to save. Lemonade's renters insurance, condo insurance and homeowners insurance are typically affordable and available quickly.

Who's this for? USAA is only available to U.S. military members, veterans and their families. But if you drive fewer than 8,000 miles per year, the SafePilot Miles program offers up to a 20% discount at your policy renewal.

Standout benefits: USAA offers discounts for a variety of situations, including some for insuring multiple vehicles and owning a vehicle that is less than three years old.

Pay-per-mile car insurance bases your premium in part on how much you drive — the less you drive, the more you save. This kind of coverage has become more popular in the past decade: Pay-per-mile and telematics policies have doubled in usage in the past 10 years, and about one in six drivers now uses one of these policies, according to data from Insurify.

This kind of coverage is billed in two parts: a daily or monthly base fee plus a few cents per mile. The daily or monthly base fee is based on the same factors as other car insurance policies, including your driving record and credit-based insurance score. Your per-mile rate — typically a few cents per mile — is then multiplied by the number of miles you drove in a month and added to your base rate.

That means pay-per-mile car insurance prices can fluctuate month to month. While you can trim costs — some estimates report customers saving up to 40% versus traditional insurance — you could see a big bill in a month when you need to drive a lot.

Typically, the people who see the most benefit from pay-per-mile car insurance are those who drive 8,000 to 10,000 miles per year or fewer. However, these programs aren't available from every insurer or in every state.

Usage-based insurance uses a phone app or a device installed in your car to collect driving data. Many of these programs monitor factors like:

• Speed
• Phone usage
• The time of day you drive
• Acceleration and braking rates
• Cornering
• Annual miles driven

Rates are set in part based on this data, along with information that typically goes into auto insurance rates, such as your driving record.

These programs often offer a discount for signing up, but that doesn't recur when you renew.

If your driving habits raise red flags — like frequent hard acceleration or braking, or consistently driving at speeds above the limits — you may also see your rates increase when you renew your policy. Some insurers, however, say that they won't raise your rates based on your habits. Read the fine print of any usage-based telematics program you're considering to find out if the data collected can raise your rates at renewal.

Weigh these benefits and drawbacks before you switch to a telematics-based insurance program:

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every pay-per-mile car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best car insurance.

To determine the best pay-per-mile car insurance companies, CNBC Select looked at various U.S. car insurance companies that offer this type of coverage.

When narrowing down and selecting the top pay-per-mile and usage-based insurers, we considered rates, coverage types, discounts, availability and customer satisfaction, using data from J.D. Power and the Better Business Bureau. We considered how the data was used, including whether insurers would raise rates based on collected data.

We sorted our top picks by the:

• Best for privacy: Mile Auto
• Best for work-from-home professionals: Geico
• Best for safe drivers: Nationwide
• Best for city dwellers: Lemonade
• Best for military members and veterans: USAA

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