How does mileage affect my car insurance?

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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UPDATED: Apr 14, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Apr 14, 2022Fact Checked

Here's what you need to know...

  • 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
Company10 miles commute, 6,000 annual mileage25 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
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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.

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.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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