People who drive less than 50 miles a day have an advantage when it comes to finding cheap insurance. After all, the risk of accidents lowers proportionately to the number of miles driven. In this article, Part 1 talks about low-mileages car insurance discounts and Part 2 discusses usage-based car insurance.
Part 1 of 2: Low-mileage car insurance discounts
While car insurance providers may differ in their definition of low mileage, many companies offer discounts to drivers that total below a cap of between 7,500 and 15,000 annual miles. Most car insurance providers will not simply take your word for how much you drive to decide eligibility for this discount.
You may have to install a tracking device or software that logs mileage and driving habits to prove eligibility, which can come with an installation or monthly fee in addition to your premium.
Beyond tracking mileage, this discount may apply if certain lifestyle changes have taken place. Recent retirees and those who have changed to a closer place of employment, begun telecommuting or carpooling usually experience drop in miles and become eligible for a low-mileage car insurance discount. A person could also become eligible for such savings after buying a second car and sharing mileage between two vehicles.
Part 2 of 2: Usage-based car insurance
Usage-based car insurance has a pay-per-mile approach, and eligibility for this type of discount also requires some proof of driving habits. Most companies offering this form of insurance require drivers to install a telematic device in their cars - a device that keeps track of mileage, time of day traveling, average length of trips, and even how hard a driver depresses the brakes. While this device reveals a lot of personal information, it can result in up to 50% savings on car insurance.
Some car insurance companies offer a discount to drivers who simply use the telematic device. This is because companies predict less risk of accident for drivers who are knowingly having driving habits monitored. Usage-based car insurance using the telematic device may also benefit parents of young drivers because it helps to monitor teen driving habits.
Keep in mind that not all states offer low-mileage or usage-based car insurance discounts, and there are often requirements vehicles must meet for eligibility. But if you don’t drive very far, it’s definitely worth looking into an insurance policy that rewards your kind of driving.