Insurance Companies Can Offer An Annual Mileage Auto Discount
Sometimes it’s not the size of the engine, or how fast the car can go, that contributes to the cost of insurance for a certain car. A key factor in the cost of insurance is the mileage on a particular vehicle.
In this day and age, drivers spend a lot of hours in the car. On average in 2013, about half of the daily commuters in the United States drove between 1 and 10 miles each way. Another quarter of drivers traveled up to 20 miles per way. This might not seem too bad, but when you calculate the number of miles you drive each month to work, not to mention any other location like to school, errands, or your children’s activities, it can really add up.
Insurance companies take into account how far a driver commutes, along with the number of days per week he drives, when setting the insurance rate. Each company has different standards of what the ideal mileage driven should be, however, the range is usually between 7,500 and 15,000 annual miles per car. This is calculated based on the average mileage for a U.S. driver. According to the U.S. Department of Transportation Federal Highway Association, the average as of February 20, 2015 was 13,476 miles. So, the insurance companies want to make sure that you are driving within the average amount per year.
Each insurance company is different. Some will simply ask you a set of questions to determine your driving habits. Others may require proof of your odometer readings at the beginning and end of your policy term. There are also programs called “pay-as-you-drive” and “pay-as-you-go”. This allows for a more personalized discount based on regular and accurate readings of your odometer, speedometer, time in the car, and braking activity. Insurance companies measure these activities by requiring you to attach a small computer monitoring device to your car. The incentive for participating in this type of tracking is to receive additional discounts for good driving habits and low mileage. Be aware that at least one company in at least one state is starting to surcharge rates based on data collected through these devices.
What else can you do to lower the number of miles you put on your car, and earn a discount on your car insurance? The DMV has several tips, including:
- Moving closer to your place of work
- Working from home or operating a business from your home
- Public transportation
- Using a secondary vehicle for non-work driving
There are other ways to reduce your car insurance premiums as well, like bundling your home and auto insurance, driving a more sensible car, having good grades (if you are under 25 years of age), and maintaining a good driving record. Your insurance company will reward you for all of your good decisions.
When scouting for an insurance company you should know each insurer may have a different rate for the number of miles you put on your car annually. Even with collector cars, which are not intended for use as daily drivers, some insurance companies can charge significantly less for auto insurance because the car is driven less than the company’s recommended amount.
Without knowledge of the rating factors of a particular company, significant discounts can be missed. That is why it is so important to involve an independent insurance agent who represents a number of companies when purchasing insurance. Independent agents have the ability to offer their clients a wide range of insurance products from a variety of providers. Since they are not tied to a certain insurance company, they can provide you with an unbiased opinion on the policy that will best suit your car insurance needs. When you provide them with your basic driving information, they will be able to recommend an auto policy that has the right annual mileage discount for you.
Sometimes knowing the rules of the game can pay off in the form of huge savings.
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