Mileage can be a crucial factor in determining the insurance amount. While it is not the only reason, the number of miles you drive per day in your vehicle can influence how much insurance you pay.
Insurance companies ask car owners for the estimated or average mileage. It is recommended to provide accurate information as it can save you from future complications. While it is tempting to give a lower estimate, it may not always work in your favor.
Does it mean you won’t get low-cost auto insurance if you drive less than 25 miles a day? Well, the answer is a little complicated. You may get the cheapest auto insurance if you have fewer daily miles. However, you need to consider other factors to determine the actual insurance amount.
Is There a Low Mileage Car Insurance?
Low mileage car insurance is applicable when you travel less than 25 miles per day in your car. Many insurance companies add people with less than 50 miles per day to the low mileage list. This is done to provide discounts for such policyholders. But not all insurers follow this process.
The insurance companies use the national average of 12000 miles per year or limit it to 7500 miles per year, depending on their insurance plans.
That said, it is important to confirm with the insurer that they consider low mileage when calculating the premium amount. Talk to insurance agents offering affordable car insurance in aurora to know if you are eligible for low mileage discounts.
Usage-Based Car Insurance
The idea behind low mileage car insurance is simple. A policyholder who drives less is less likely to file a claim and thus can pay less premium amount compared to someone who is constantly traveling in the car.
Usage-based insurance is a little similar to mileage-based or Pay-Per-Mile insurance. While it provides the same coverage as traditional insurance, the calculation of the premium amount is different.
A telematics device records mileage in the car. It is either connected to an app on your phone or linked to your insurance account to update the miles you travel in the vehicle and allow the insurer to assess what type of driver you are. A driver with good driving habits and a clean record (no speeding tickets, accidents, etc.) will be eligible for further discounts.
Your driving speed, the timings of when you use your car, the duration, the distance between two places, the locations, and your driving tendencies are monitored using the telematics device to determine the likelihood of you being trapped in an accident or collision. Fewer chances of risk directly imply fewer chances of claims. Due to the lower risk of filing a claim, the insurer can lower the premium amount.
Pay-Per-Mile is where the insurance company calculates the premium amount based on how many miles you travel per month. The total amount is divided into a base rate (based on general factors like your age, car model, driving record, credit score, etc.) and a variable fee charged per mile. The insurer determines the fee per mile depending on how much you drive and how you drive.
Usage-based insurance and Pay-Per-Mile are both favorable for people driving less than 25 miles a day. You will save money on the premium amount by paying for the miles you drive in the car.
Is There a Cheap Car Insurance for Low Mileage Drivers?
So, is there really such a thing as cheap automobile insurance for low mileage drivers?
Yes, but with other factors included when calculating the premiums. Driving less than 25 miles a day is not the only consideration to lower the premium amount. This is a good plan to choose if you don’t use your car often. People who work from home, live close to their workplaces, and use public transportation prefer low mileage insurance to save money on premiums.
That said, it also depends on where you live. The insurance regulations change from one state to another. A person in California might pay a lot less insurance premium than someone in Michigan or New Jersey.
You need to be a good driver and have a worthy driving record for insurance companies to offer low mileage discounts. Being a responsible driver and using your car for less than 25 miles a day can certainly reduce the insurance burden to a great extent.
Contact insurance agents to get quotes from multiple insurers in your state. Before choosing an insurance company, compare the policies, the premium amount, and the T&C. All policies are not the same, even if you are a good driver. Rely on an expert to guide you and make the right decision.