How much does mileage affect car insurance rates?
Does mileage affect your car insurance? Miles driven affect car insurance rates because they increase risk, that is why insurance companies ask how many miles you drive for an insurance mileage estimate. The less you drive, the less you pay, so your insurance goes up with mileage. Long commutes can cost you an extra $14/mo.
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Michael Vereecke
Commercial Lines Coverage Specialist
Michael Vereecke is the president of Customers First Insurance Group. He has been a licensed insurance agent for over 13 years. He also carries a Commercial Lines Coverage Specialist (CLCS) Designation, providing him the expertise to spot holes in businesses’ coverage. Since 2009, he has worked with many insurance providers, giving him unique insight into the insurance market, differences in ...
Commercial Lines Coverage Specialist
UPDATED: Jul 24, 2024
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UPDATED: Jul 24, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Usually, insurance costs more for a new car. However, if you have an antique or classic car, insurance is more expensive despite having fewer miles on the vehicle
- For everyday cars, the more mileage you put on your car, the more you are using it and the risk of damage increases which means an insurance provider will charge more for coverage
- Is car insurance cheaper the fewer miles you do? Insurance companies charge you according to the potential costs you present to them. Therefore, the less you drive, the less you will usually pay
Does your annual mileage affect car insurance premiums? What is the car insurance mileage limit that will wind up costing more for commuters?
While there are many factors that affect car insurance rates, mileage does have an effect on car insurance rates. The mileage on your car will make a difference in what you pay when you first insure it, but the miles you put on your car afterward will also have a substantial impact.
It’s best to be honest with your car insurance company. If they find out you have lied about how many miles you drive, they can cancel your insurance, deny your claims, or even have you charged with insurance fraud. Saving a few dollars on cheap car insurance isn’t worth any of that.
Each company will weigh how many miles you drive differently. For some companies, more miles will equal a much higher car insurance rate. For other companies, the distance you drive is not a big deal. The best way to find a company that meets your needs with the best rates is to compare quotes.
No matter how many miles you have, you can always get a cheaper rate by entering your ZIP now to get multiple car insurance quotes.
How to reduce your mileage and car insurance rates?
When you buy a car, you certainly don’t buy it with the intention of storing it in a garage for rare, occasional use. Unless, of course, the car is a show car or a project car. In that case, look into very specialized antique or classic auto insurance.
Therefore, plan on putting miles on your car and plan on your insurance possibly going up as a result of it. One of the best ways to avoid an increase in your car insurance rate is to keep your mileage to a minimum. Many companies will even offer a low mileage car insurance discount.
Why do insurance companies ask how many miles you drive? It’s pretty simple. The more miles you drive, the more chances you have of being in an accident. If you are in an accident, chances are your car insurance company will have to pay.
When you first insure your car, your insurance company will ask you how many miles you estimate your car will be driven annually. Try to keep this number as accurate as possible. If you underestimate the mileage, your car insurance rates can easily increase.
Many companies will charge you more if you drive more. However, some companies don’t use your annual mileage to add big increases to your rates.
Let’s look to see how do miles driven affect insurance rates. This table shows you how driving more miles can affect your car insurance.
Average Annual Rates Based on Commute and Mileage
| Company | 10 miles commute, 6,000 annual mileage | 25 mile commute, 12,000 annual mileage |
|---|---|---|
| Allstate | $4,841.71 | $4,934.20 |
| American Family | $3,401.30 | $3,484.88 |
| Farmers | $4,179.32 | $4,209.22 |
| Geico | $3,162.64 | $3,267.37 |
| Liberty Mutual | $5,995.27 | $6,151.63 |
| Nationwide | $3,437.33 | $3,462.67 |
| Progressive | $4,030.02 | $4,041.01 |
| State Farm | $3,175.98 | $3,344.01 |
| Travelers | $4,399.85 | $4,469.96 |
| USAA | $2,482.69 | $2,591.91 |
Some companies like Progressive charge almost nothing extra for more mileage, while other companies like State Farm will charge around $14 more a month just for driving farther.
There are also companies out there that charge you by miles for insurance. These companies typically have you install a device in your car that records your mileage. Your car insurance rate will be calculated based on how far you drive.
Watch this video for more information on how these programs work.
If you don’t drive very much, be sure to take with your agent about reducing your car insurance rates, whether it’s with a mileage discount or with a pay per mile program.
Most car insurance companies offer low-mileage discounts, but some also offer pay-per-mile policies that can cut off costs for low-mileage drivers. If you have a car that sits in the garage for days or if you work from home, it may be time to consider pay per mile car insurance. This type of coverage is ideal for low-mileage drivers/infrequent drivers looking for cheaper car insurance. We should note that of the major insurance companies, Geico currently doesn’t offer a low mileage discount. If you have Geico insurance and want to change coverage based on low mileage driven, you may have to shop around.
With pay-per-mile insurance programs, the less you drive, the less you pay. Insurance companies determine rates based on risk, or the likelihood of filling a claim. Of course, the less you’re driving, the less likely you’re to have an accident. Low-mileage insurance charges drivers a certain number of cents per mile driven in a month on top of a base rate.
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How do insurance companies check mileage accuracy on car insurance?
How do insurance companies verify mileage? Insurance companies will periodically ask how many miles you have on your car. It is never a good idea to cheat on your car insurance, so even if you are tempted to lie about this, don’t do it.
The only person you are hurting is yourself, especially if you have a claim that can’t be substantiated by your mileage.
Imagine if you tell your car insurance company you only have 10,000 miles on your car when you have 17,000 miles. Although it seems like a small white lie, according to the Insurance Information Institute, it can technically be considered insurance fraud; and this type of insurance fraud will only save you a minute amount of money.
Yes, you may benefit from a low mileage discount, but it’s not worth the cost of losing your coverage.
The insurance company will most likely not come to your house to verify your car’s mileage. However, if you have any accident or any insurance claim, your mileage will be reviewed by the insurance adjuster and the repair shop.
If this happens, your world could crumble around you if your mileage is not close to what is expected. An insurance discount won’t make up for the damages you will have to pay out of pocket if your insurance company decides to not pay for the claim.
Your insurance claim can legitimately be denied, leaving you financially responsible for all damages involved. You can also be held liable for insurance fraud, which would cause a hassle because it would have to be proven in a court of law.
How to estimate mileage on a car insurance policy?
The best way to avoid problems with your car insurance and still pay a fair rate is to be honest and calculate your mileage as accurately as possible. If your mileage varies widely on an annual basis, discuss this exception with your car insurance agent.
Otherwise estimating the mileage for your car insurance is relatively easy. The initial mileage on your car becomes negligible once you buy your car insurance. So, after you report your beginning mileage you only need to determine how many miles you drive on an annual basis.
The US Department of Transportation estimates that the average driver racks up over 13,000 miles in a year. If you drive less than that, you might be able to get lower car insurance rates.
Clock how many miles you drive to work and back and then calculate your annual usage for using your car for work. Add personal usage to your mileage as well.
It is also a good idea to include your annual road trip for your vacation. If you drive 500 miles one way every summer to visit your aunt in a bordering state, add 1,000 miles to your insurance mileage estimate.
The difference may not increase your insurance rate at all, but at least you will have appropriate insurance coverage. Also, if your situation changes and you begin to drive more, don’t forget to increase mileage on car insurance estimates.
The insurance company is not going to hold you to every mile you estimate. They use your estimate to gauge if you drive 7,500 miles or less every year or if you drive more than 10,000 miles every year.
Some companies also use car insurance mileage brackets to determine how much your mileage will raise your rates. These brackets usually start at 5,000 miles and go up.
What happens if I go over mileage on my insurance estimate? Just be honest with your agent. If you are just taking a once in a lifetime cross country road trip, that is different than taking a new job in another town that will routinely put you over your estimate.
It is in your best interest to give a fair assessment of your estimated mileage to your insurance agent so that your insurance rate is calculated correctly.
If you are not a regular driver, your car insurance should be somewhat less than the person who wears out a car every couple of years. Mileage of 7,500 or less annually is usually considered average and should garner you a fair rate.
Shop around to avoid paying too much for your car insurance. Enter your ZIP now to compare car insurance quotes and find a company that gives you a break based on your mileage.
- https://www.iii.org/article/background-on-insurance-fraud
- https://www.fhwa.dot.gov/ohim/onh00/bar8.htm
The Impact of Mileage on Car Insurance Rates: Understanding Tiers, Discounts, and Programs
Mileage significantly affects car insurance rates, as it directly correlates with risk assessment. Insurance companies, such as AAA, use AAA mileage brackets to classify drivers based on their yearly mileage. This classification helps in determining the premiums, with those driving less typically benefiting from lower rates. The auto insurance mileage tiers employed by insurers categorize drivers into low, medium, and high mileage brackets, thus ensuring a fair and precise calculation of insurance costs.
When it comes to State Farm mileage brackets, these are specifically designed to accurately assess the risk based on how much a person drives annually. It’s crucial for policyholders to be truthful about their mileage, lying about mileage on car insurance can lead to serious consequences, including policy cancellation and denial of claims. Conversely, underestimating mileage on car insurance can similarly lead to complications, potentially resulting in higher premiums once the discrepancy is discovered.
Insurance providers often reward low-mileage drivers with discounts. For instance, the AAA low mileage discount or AAA mileage discount offers lower premiums to those who drive fewer miles. These discounts are a part of the broader auto insurance mileage discount strategy that incentivizes drivers to reduce their mileage. AAA mileage rate and AAA mileage verification ensure that the discounts are applied accurately based on actual driving habits.
Programs like Allstate Milewise cater specifically to drivers who prefer insurance based on actual miles driven. This program, part of Allstate insurance by the mile, uses devices to track mileage and provide customized rates. However, users often have concerns, as seen in Allstate Milewise complaints, regarding the Allstate Milewise device problems and Allstate Milewise customer service. Despite these issues, the Allstate Milewise program remains a popular choice for low-mileage drivers, with detailed information available through Allstate Milewise login and various Allstate Milewise reviews.
For those curious about what happens if I go over my mileage, it’s important to regularly update your insurer with your car insurance annual mileage estimate. This ensures your policy accurately reflects your driving habits. Companies like Geico allow easy updates through Geico’s option for changing annual mileage. Maintaining an accurate mileage estimate for car insurance and understanding annual mileage meaning can help avoid higher premiums and ensure continuous, appropriate coverage.
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Case Studies: Impact of Mileage on Car Insurance Rates
Case Study 1: Low Mileage Discount
John is a part-time remote worker who primarily uses his car for local errands and occasional weekend trips. His insurance provider offers a low mileage discount for policyholders who drive below a certain mileage threshold annually. Due to his low mileage, John qualifies for the discount, resulting in reduced car insurance rates.
Case Study 2: High Mileage Commuter
Sarah commutes long distances every day for work. She drives over 50 miles each way, totaling thousands of miles annually. Sarah’s insurance provider considers her high mileage as an increased exposure to potential accidents or risks on the road. As a result, her car insurance rates may be higher to reflect the higher mileage driven and the associated risk.
Case Study 3: Mileage Monitoring Program
Mike’s insurance provider offers a mileage monitoring program that tracks his driving habits using telematics devices or smartphone apps. Through this program, Mike receives personalized rates based on his actual mileage. If Mike’s mileage remains below a certain threshold, his car insurance rates are adjusted accordingly, providing potential savings for responsible driving habits.
Case Study 4: Insurance Provider Policies and Mileage
Samantha has an insurance policy with a provider that does not consider mileage as a significant factor in determining rates. Samantha’s insurer primarily focuses on other factors, such as driving record and location, when calculating her car insurance rates. As a result, her premiums remain relatively unaffected by her mileage.
Frequently Asked Questions
Can I change my car insurance policy if my mileage changes?
Yes, you can usually change your car insurance policy if your mileage changes. Contact your insurance provider to update your policy accordingly.
Does driving for work or business purposes affect car insurance rates?
Yes, driving for work or business purposes can impact rates. Commercial auto insurance may be needed for business-related driving, which has different rates and coverage.
Can high mileage cars still get affordable insurance rates?
Yes, high mileage cars can still get affordable insurance rates. Mileage is one factor among many when calculating premiums.
Can I get a refund if I overestimated my annual mileage on my car insurance?
Refunds for overestimating annual mileage depend on the insurance company’s policies. Contact your insurer to understand if refunds are available.
What is considered low mileage for car insurance?
Low mileage varies among insurers. Generally, driving 7,500 miles or less annually is considered average. However, check with your insurer for their specific definition.
Are there car insurance companies offering discounts for low mileage?
Yes, many car insurance companies offer discounts for low mileage. It’s important to compare quotes to find the best rate for your specific mileage.
Does annual mileage affect car insurance?
Yes, annual mileage affects car insurance because it influences the risk profile. Higher annual mileage means more time on the road, increasing the likelihood of accidents, which can lead to higher premiums.
Does mileage make a difference to car insurance?
Yes, mileage makes a difference to car insurance. The more miles you drive, the higher the risk of being involved in an accident, which can result in higher insurance rates.
Does reducing annual mileage affect car insurance?
Yes, reducing annual mileage can affect car insurance by potentially lowering your premiums. Many insurance companies offer discounts for drivers who log fewer miles each year.
How many miles can I claim on my taxes?
The number of miles you can claim on your taxes depends on the purpose of the driving. For business purposes in 2024, the IRS standard mileage rate is 65.5 cents per mile.
What happens if you lie about mileage on insurance?
If you lie about mileage on insurance, you risk having your policy canceled, claims denied, or being charged with insurance fraud. Accurate reporting is crucial to maintain coverage and avoid legal issues.
What if I drive more miles than my insurance?
If you drive more miles than your insurance policy covers, you should inform your insurer. Failing to do so can result in denied claims or increased premiums once the higher mileage is discovered.
What is the best annual mileage for insurance?
The best annual mileage for insurance is typically low mileage, as it often qualifies for discounts. However, it varies by insurer, so check with your provider for specific thresholds.
Can I change the mileage on my insurance?
Yes, you can change the mileage on your insurance by contacting your insurer and updating your policy to reflect your current driving habits. This can affect your premium.
Can insurance companies check your mileage?
Yes, insurance companies can check your mileage through various methods such as telematics devices, annual odometer readings, and claims processing.
Can you tamper with car mileage?
Tampering with car mileage is illegal and considered fraud. It can lead to severe penalties, including fines and imprisonment.
Do employers have to reimburse mileage?
Employers are not required by federal law to reimburse mileage, but some states have specific regulations. Additionally, many employers offer mileage reimbursement as a company policy.
Do you need current car mileage for car insurance?
Yes, providing current car mileage is important for car insurance as it helps insurers assess risk and calculate premiums accurately.
Does Allstate offer a low mileage discount?
Yes, Allstate offers a low mileage discount for drivers who log fewer miles annually, potentially lowering their insurance premiums.
Does commuting increase car insurance?
Yes, commuting can increase car insurance premiums because it typically involves driving during peak hours and in heavier traffic, which raises the risk of accidents.
Does Enterprise do unlimited mileage?
Yes, Enterprise offers unlimited mileage on certain rental agreements, but it depends on the specific rental terms and conditions.
Does Geico offer a discount for low mileage?
Yes, Geico offers a discount for low mileage, rewarding drivers who log fewer miles annually with lower insurance premiums.
Does Geico offer pay-per-mile insurance?
No, Geico does not currently offer pay-per-mile insurance. However, other insurers may provide this type of coverage.
Does State Farm offer a low mileage discount?
Yes, State Farm offers a low mileage discount for drivers who drive fewer miles annually, potentially lowering their insurance rates.
How can you benefit from sharing your mileage with your insurance company?
You can benefit from sharing your mileage with your insurance company by potentially qualifying for low mileage discounts, which can reduce your premiums.
How do car insurance companies know your mileage?
Car insurance companies know your mileage through methods like telematics devices, annual odometer readings, and vehicle inspections or claims processing.
How do I know my annual mileage?
You can know your annual mileage by tracking your odometer readings over a year or by calculating the average miles driven per week and multiplying by 52.
How do insurance apps know who is driving?
Insurance apps know who is driving by using telematics technology that tracks driving behavior and patterns, sometimes paired with user input or smartphone data.
How do insurance companies track your mileage?
Insurance companies track your mileage through telematics devices, policyholder reports, vehicle inspections, and data from repair shops or claims.
How does Allstate Drivewise work?
Allstate Drivewise works by using a mobile app or device to track your driving behavior, such as speed, braking, and mileage, rewarding safe driving with discounts.
How does distance from work affect insurance rates?
Distance from work affects insurance rates because longer commutes increase the time spent on the road, raising the risk of accidents and leading to higher premiums.
How does pay-per-mile car insurance work?
Pay-per-mile car insurance works by charging a base rate plus a per-mile fee, making it cost-effective for drivers who log fewer miles annually.
How much do extra miles cost on insurance?
The cost of extra miles on insurance varies by provider, but generally, more miles driven can lead to higher premiums due to increased risk exposure.
How much do insurance companies pay for mileage?
Insurance companies typically reimburse mileage for covered claims based on the standard mileage rate set by the IRS or the terms of the policy.
How to avoid paying excess mileage charges?
To avoid paying excess mileage charges, accurately estimate your annual mileage, opt for unlimited mileage plans, or negotiate higher mileage limits when possible.
How to calculate annual mileage for insurance?
To calculate annual mileage for insurance, track your daily or weekly mileage and multiply by the number of days or weeks you drive in a year.
What is the annual mileage for car insurance?
Annual mileage for car insurance is the total number of miles you drive in a year, which helps insurers determine your risk level and premium rates.
What is the estimated annual mileage?
Estimated annual mileage is an approximation of the number of miles you expect to drive in a year, used by insurers to calculate premiums.
What is low mileage for car insurance?
Low mileage for car insurance typically refers to driving less than 7,500 to 10,000 miles annually, which can qualify for discounts with some insurers.
What is the per-mile rate in insurance?
The per-mile rate in insurance is the cost you pay for each mile driven under a pay-per-mile insurance policy, in addition to a base rate.
What is the difference between commute and pleasure for insurance?
The difference between commute and pleasure for insurance is that commuting involves driving to and from work, usually resulting in higher premiums, while pleasure driving is for non-work-related purposes, often leading to lower rates.
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Enter your ZIP code below to view companies that have cheap car insurance rates.
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Michael Vereecke
Commercial Lines Coverage Specialist
Michael Vereecke is the president of Customers First Insurance Group. He has been a licensed insurance agent for over 13 years. He also carries a Commercial Lines Coverage Specialist (CLCS) Designation, providing him the expertise to spot holes in businesses’ coverage. Since 2009, he has worked with many insurance providers, giving him unique insight into the insurance market, differences in ...
Commercial Lines Coverage Specialist
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.