What Mileage Is Cheapest for Insurance?

You’re on a mission to save money on your car insurance, so you’re exploring the discounts offered, and you’re wondering if you qualify for a low-mileage discount. Here’s what insurers consider low mileage and how much you can reduce your premiums.

Low-Mileage Discount Guidelines

From an insurer’s perspective, the less you drive, the lower your chances of being in a car accident and filing a claim. If you’re less of a risk to insure, your premiums will be lower. Still, state laws and car insurance companies vary in their definition of low mileage. Generally, most providers base discounts on driving less than 12,000 miles per year. On average, US motorists log roughly 13,500 miles annually. This figure from the Federal Highway Administration gives you a reference point for low mileage.

However, some insurers use 10,000 annual miles as a guideline. With others, you may need to drive less than 7,000 miles to qualify for a discount. The specific number also depends on each insurance company. Discounts range from 5 to 20 percent among various providers. 

How Insurers Gauge Discount Eligibility

When you apply for car insurance in San Diego, a provider will ask you to estimate your annual mileage. You’ll want to be honest when reporting this. Insurers have various ways of monitoring a customer’s mileage. For instance, you may be required to disclose your odometer readings on a regular basis. Or, if you file a claim, you may need to state your car’s current mileage.

Some providers offer pay-per-mile car insurance, a usage-based policy. With this type of plan, you install a device in your car that tracks your mileage. Then you receive a monthly discount based on the miles recorded.

An insurance carrier will also inquire about your regular commute. If you drive to and from a job, you’ll report your daily driving distance and commuting days per week. Then the insurer will compare your commuter miles to your annual mileage estimate. After the company evaluates your application, you’ll be assigned to a mileage bracket. If your usage conforms to the low-mileage limit, you’ll land the discount.

Your Driving Habits

Currently, it’s easier than ever to qualify for low-mileage and pay-per-mile discounts. Increasingly, people are working from home or commuting locally. Plus, more retailers are delivering their goods and shipping them quicker. Accordingly, there’s less need for driving to various stores.

If you work in a city, consider using mass transportation. It’s often faster than driving, and it will reduce your mileage. It can also be less nerve-racking than plodding along in heavy traffic. If you plan on retiring or have already, convey any change in mileage to your insurer. You may now qualify for a low-mileage discount. Or, if you’re driving less for other reasons, contact your insurer to update your mileage estimate.

How to Calculate Your Annual Mileage

First, set your car’s trip odometer to zero. Then document the number of miles you drive each day for a week. Based on the above low-mileage guidelines, the table below will give you an idea of your mileage bracket:

• 12,000 annual miles = 33 miles daily
• 10,000 annual miles = 27 miles daily
• 7,000 annual miles = 19 miles daily

Also, record your odometer reading after seven days. For your annual mileage estimate, multiply that number by 52. Then ask your insurer if you can get a low-mileage discount.

Other Car Insurance Discounts to Pursue

Good Driver Discount

According to California law, you’re eligible for a 20 percent discount on your car insurance if you meet the state’s good driver standards. Here are the criteria:

• You’ve been licensed for at least three years
• You’ve had no more than one point on your driving record during that time
• You haven’t been responsible for an accident causing another’s injury or death
• You haven’t been required to attend traffic school more than once
• You’ve had no DUI-related charges over the past 10 years

One way to promote safe driving is by ignoring distractions while operating your car. In particular, avoid using your phone. If you text while driving, you could end up killing other motorists, as hundreds of drivers do each year.

Here’s why. At 55 mph, if you’re distracted for five seconds, it’s like driving the length of a football field with your eyes closed. This warning comes from the National Highway Traffic Safety Administration. If you receive a text or call, always park your car before responding.

Defensive Driving Course Discount

Another way to lower your premiums is by completing a defensive driving course. You’ll save 5 to 20 percent on your car insurance for three years, with the discount varying by insurer. You can either take an online course independently or a physical class with other students.

Most courses run six to eight hours. You’ll revisit traffic laws, learn how to drive watchfully, and improve your driving judgment and skills. In turn, your risk of car accidents will be less, stabilizing your premiums.

For a detailed personalized quote on auto insurance, contact your insurance agent. If you’re looking for reliable car insurance and high-quality service, call on the trustworthy agents from Altra Insurance Services. We also provide dependable renters, homeowners, and motorcycle insurance. San Diego drivers should give us a call today at (800) 719-9972.