Low Mileage Auto Insurance Policies

If you are traveling less than 7,5000 miles a year you may be able to benefit from several car insurance policies geared for low mileage-drivers. A discount for low-mileage offers a percentage off of the cost of a standard policy. Although there are some companies who would offer a small discount for driving less with an odometer reading confirmation, motorists may need to look for telematics based programs and pay-per-mile auto insurance to make the most of their infrequent driver status.

Many urban drivers prefer owning a vehicle despite having good and frequent public transport in their localities. Their automobiles may be staying in the same parking spot for days. Limited use vehicle insurance can be ideal for many owners and help in keeping the costs down, if they keep the car for social and pleasure only, and reside in a place near work and children’s school. If you are retired or working from home most days, it may be for you as well.

What Is Considered Low Mileage?

You can get cheap car insurance rates for traveling under 7,500 miles a year. That would be less than 20 miles a day. Considering you don’t go out at all in many days, it may be achievable as long as you don’t take long road trips.

Also, second vehicles fall into this limited usage category pretty easily as the most of the load carried by the main car. They are generally kept for sentimental value and as a backup and don’t hit the roads much. Sometimes this can be a classic auto. In that case, they can actually stay under 3,000 that will result in a bargain premium of about $300 – $500 per annum.

Types of Usage Based Vehicle Insurance Policies

The risks of accidents and claims are not as high as it would be when a vehicle stays on the roads for long hours every day. Although there is no arguing against this logic, it is actually hard to manage low-mileage vehicle insurance discounts since people often underestimate the distances travelled annually. That is why many companies don’t offer or offer a very little infrequent user discount.

So, motorists may have to look for programs and policies designed to reward safe and infrequent drivers. Here are some of the options to consider;

Discounts for Low Mileage Drivers: You can get cheaper standard coverage when you meet the above qualification limits. Some automobile insurers like State Farm offer reduced rates on standard policies based on odometer readings. They may require proof from time to time but they don’t need you to install any gadget like the solutions below. That is why people who don’t want any monitoring may prefer it. Besides, it is simple to set up.

Usage Based Car Insurance: They are based on fitting a telematics device on the auto or using an app to monitor your driving behaviours. A few companies like Progressive and State Farm offer these programs. They collect information about patterns as well as distance. You don’t necessarily need to travel less to benefit from these types of policies. If you are a young person or had a premium increase due to a recent accident, you can still save by minding a few things like accelerating, speeding, braking and avoiding driving at night. There are two types of usage-based policies;

  • Driving-based programs allow you to save for being a safe driver as well as measuring your yearly mileage and offering discounts for it.
  • Mileage-based programs only measure how many miles you travel and base your rates on that.

Pay Per Mile Insurance: These are strictly based on driving distance but only few carriers offer them. You need to install telematics or have an app on your cell phone again that will only transmit odometer reading back to your insurer. Companies like Metromile offer pure pay-per-mile insurance but they aren’t available in every state.

Nationwide SmartMiles is a pay-per-mile program available in most states. They offer the same benefits as a traditional auto insurance policy but with a flexible monthly premium that’s based on mileage. SmartMiles has a base rate and a mileage rate. The telematic device they fit or access they are granted within the program of connected cars allow the company to measure mileage and adjust monthly premiums accordingly.

The above solutions can be used to counter large premium increases just after a claim and work well for teenagers, who are otherwise considered high-risk. If you hardly drive and still cannot give up the car altogether, you may benefit from infrequent driver discounts these automobile insurance policies offer.

Also, these programs may offer large discounts in some states like California but the savings may not be as high in other states. Furthermore, they aren’t available in every state so you need to check availability.