An automobile parked at home most of the time is hardly going to be involved in a collision or cause damages to any property or injuries to any person. This is a well accepted point in the industry and there are a few good solutions in the market. Low mileage vehicle insurance can be ideal for many owners and help in keeping the costs down. Let’s have a look at qualification requirements and conditions to determine their applicability to you.
Full coverage protects you against unexpected vehicular losses and Liability. Yet it can be a large expense for many families trying to reduce costs. That is why there are millions of drivers with no coverage even though it is against the law in the US and most countries. There is an option that may fit many people. They can still have a car and pay low premiums by taking advantage of being a less frequent traveller.
Most people who live in urban areas can benefit from low mileage insurance discounts. They usually prefer using trains or other means of transport to get to work or social activities because it is faster due to heavily congested roads and it can be the cheaper option once you take parking and fuel costs into account.
Many people prefer owning a vehicle despite having good and frequent public transport in their localities. But they may not actually drive cars as much as they hope to do. It may be staying in the same parking spot for days. Then, they can at least reduce financial burden by paying lower premiums.
Limited use auto insurance policies can be advantageous for you if you keep it for social and pleasure only, and reside in a place near work and children’s school. Another way of saving money is to have a garage to park it at night. If you have it you should inform the agent.
What Is Considered Low Mileage?
You can get really cheap car insurance rates for traveling under 7000 miles a year. Several companies may set it at 10,000. But in majority of the cases the upper qualification limit would be around 7,500. That would be less than 20 miles a day. Considering it doesn’t go out at all in many days, it may be achievable as long as you don’t take long road trips.
Price cuts would be pretty significant under 3000 but it is hard to manage and you go over it pretty fast. When you start traveling a little bit more and go over 25,000 a year you are considered a frequent user and expected to pay more than average insurance premiums. Typically this would be due to visiting so many work related sites and people.
Also, second vehicles fall into this limited usage category pretty easily as the most of the load carried by the main one. They are generally kept for sentimental value and as a backup and don’t hit the roads much. Sometimes this can actually be a classic auto. In that case, they can actually stay under 3,000 that will result in a bargain premium of about $200 – $400 per annum.
Insurance for occasionally used automobiles should be reasonably cheap. The risks are not as high as it would be when a vehicle stays on the roads for long hours every day. It is important to have a good look around and get a few quotes for a less frequently used car.
Types of Usage Based Vehicle Insurance Policies
Discounts for Low Mileage Drivers: You can get cheap standard coverage when you meet the above qualification limits. Most companies can quickly reduce rates 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 and widely available.
Pay As You Go Policies: They are based on fitting a telematics device on the auto that transmits information back to a monitoring center. There are several carriers offering them. 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 since you will get credits for staying within speed limits, avoiding braking and late nights.
Pay Per Mile Insurance: These are strictly based on driving distance but only few carriers offer them. You need to install telematics again that will only transmit odometer reading back to them. So, there are hardly any privacy issues here but it cannot be helped if you are a skeptic.
There are a few policy types on offer and there will be more coming to market. There is no doubt that many motorists would benefit from them. They can be great in countering large premium increases just after a claim and work well for teenagers, who are otherwise considered high-risk.
In any case, you should talk to the agent and see the options. Most people wouldn’t need to jump through the hoops since most companies offer low mileage auto insurance discounts one way or another. However, it is a factor that needs attention. Otherwise, you may be tossed in with typical drivers and charged average rates when you have better prices available to you.