Everyone makes their approach to buying their vehicle insurance differently. Each person has specific areas that they want to focus on. Of course, everyone wants the best premiums that they can get. Sometimes focusing just on the cost of these can cause them to lose out on benefits.
An assumption that is often made is that every insurance company is the same. It isn’t worth the time to shop around. For those that do insurance shop, they have found it to be very beneficial. They have also discovered that all insurance companies are not the same.
Where these business entities often differ is in the discounts that they offer. There are lots of discounts which the insurance industry offers. However, some are more popular than others. Those that are not as popular can be very important to some drivers but often get missed. One of this may be insurance discounts for low mileage drivers.
- 1 What is Low Mileage Insurance?
- 2 How Much Does Mileage Affect Car Insurance?
- 3 Using Vehicles for Road Trips
- 4 Misleading Mileage Can Be More Costly
- 5 Is Insurance Cheaper If You drive Less?
- 6 Why Do Insurance Companies Offer Low Mileage Discounts?
- 7 What Is Pay as You Go Insurance?
- 8 How To Take Advantage of the Low Mileage Discount
What is Low Mileage Insurance?
Low mileage insurance is a type of reward that insurance companies will give clients. It is for those who only put a certain amount of mileage on their vehicle throughout the year. The bonus is in the form of a discount on the premiums for the policy that the client has opted into.
How Much Does Mileage Affect Car Insurance?
Vehicle insurance is very complicated. There are a lot of variables that pertain to each person needing insurance. It is what determines what they will end up paying for insurance. Added to all of this is how many miles the driver will be driving for the duration of the policy. It is something insurance companies take into account. Even if the low mileage discount is not something the insured wants.
Insurance companies may use the mileage as a metric for how often the vehicle is on the road. It can help the company assess the risks for that driver. Most often drivers use their vehicle to drive back and forth to work each day. A common question asked is what is the total mileage per day for this. The answer alone can make a big difference in the cost of the insurance.
Using Vehicles for Road Trips
Then there are those that may not put that much mileage on the vehicle for work travel. They may use their vehicles for road trips for the family. It can play a role in the insurance rates based on the mileage.
Insurance Companies Gather Information
There may be drivers that figure the Insurance company won’t know what mileage is on the vehicle. These drivers are not aware to what extent insurance companies can gather information.
Insurance companies can gather information from third parties. They can get the odometer readings of your vehicle. For example, the company who does your oil change may have an agreement to supply this type of information to insurance companies. Some of the insurance companies are indicating that they do gather this type of information. In a variety of ways. Aside from a third party, they can get it from the insured themselves. Or, they can even potentially get it from a monitoring device that an insured may use on their vehicle.
Misleading Mileage Can Be More Costly
The lesson here is that an insured cannot be misleading with their insurance company. Some Insurance companies will form the belief that drivers may downplay the mileage. These insurance companies may compensate for this some. Insurance companies have included this untruth as an automatic risk factor. It is now factored into the policy premiums.
Is Insurance Cheaper If You drive Less?
Insurance may be cheaper for those drivers who seek out Insurance companies that offer low mileage discounts. To truly benefit from this then there are some things to take into account. As mentioned being honest with the information provided about mileage is the first thing.
Secondly, the driver needs to look at their driving needs. If low mileage is something that is not going to be an issue, then the savings will be worth it. In some cases, it may not be worth it. Doubts about low mileage on behalf of the driver may make this the case.
How much of a discount is something else to consider. In general, the discount for low mileage driving can range between 3% to 10%. It reduces the cost of the premiums. The discount added to other discounts can create substantial savings.
Why Do Insurance Companies Offer Low Mileage Discounts?
If a driver has a good driving record, one may think that should be enough to offer a good discount. It should mean that low mileage discounts aren’t necessary. A good driving record is a clean record that has no traffic infractions and no accidents. It is combined with the many years that the driver has been driving and has maintained this excellent record.
Insurance companies must show concern for other drivers on the road. It includes the ones that they are not insuring. Or. Those drivers who are driving that have a bad driving record. The more time the good drivers spend on the road, the more they may be driving in the same areas as these drivers. There is a great risk of an accident with more traffic exposure. It is where the mileage plays an important factor. Short drives on a daily basis may mean less mileage. In turn, it means less exposure to risk. The insurance companies recognize this.
What Is Pay as You Go Insurance?
Don’t confuse low mileage insurance with pay as you go insurance. This type of insurance has other criteria. It is in addition to the mileage that the car is experiencing.
How To Take Advantage of the Low Mileage Discount
The best way to take advantage of this discount is to be fully aware of what it is about. When offered by an Insurance company, ask questions about it. Then based on the answers an individual can make an informed decision can. One of the best ways to shop for vehicle insurance is by getting quotes. Then doing a quote comparison. After narrowing down the best ones based on this, go a step further. Ask the right questions of the Insurance companies that are of interest.