Is Car Insurance Cheaper If You Drive Less Than 25 Miles Per Day?

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Is Car Insurance Cheaper If You Drive Less Than 25 Miles Per Day?

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Car insurance has a basis on the concept of risk. The more mileage you cover, the more likely you can get into an accident. Most insurance companies use your average yearly mileage to calculate their car insurance rates. So it is very likely that you will pay lesser premiums if you drive for less than 25 miles daily. However, other factors also play a role in determining what rate your insurance company will charge. So it is very possible to be driving for less than 25 miles per day but you still end up paying more than another person whose mileage may be higher.

How Can Car Insurance be Cheaper?

Aside from low mileage, factors such as your driving habits, the type of car that you drive, and your driving record plays a role in determining the amount of premium you will be paying. You can deliberately tweak these factors in your favor so that you end up paying lesser rates in the long run.

Take a look at some of the ways these factors will affect your car insurance rates.

Driving Record

Your car insurance company will analyze your driving record and use it to determine the rates that you’ll be paying. If you had a role in multiple accidents in the past, your rates will be higher. Your insurance company will view you as a high-risk investment. Drivers who do not have accident records can benefit from this analysis by ensuring they stay accident-free.

Demographics

Some demographics go into consideration which include the status of your neighborhood, age, and gender. A person who lives in an urban community will most likely pay more car insurance rates than the person in a rural area. This is because urban areas are more prone to high cases of accidents, vandalism, and theft. Chances are that people in these locations will seek claims more frequently. Therefore, they have to pay a higher premium.

Limits and Deductibles

A limit refers to the maximum amount that the insurance company will pay to cover a loss. Each auto insurance policy has a unique coverage liability limit. Typically, the more coverage you purchase, the more the premiums you'll have to pay. A deductible on the other hand is the amount you have to pay before the insurance company can help you to cover the insured loss. Deductibles have an inverse relationship with the premiums you'll be paying. If you want to pay lesser premiums, just set your deductible limit at a higher level.

Type of Car

The amount charged per premium will vary depending on the type of car that you are driving. Insurance companies analyze how safe the car is when driving or how well it can protect an occupant in case of an accident. If the car offers excellent protection and safety, you will most likely pay lesser premiums. Car insurance rates are also based on the potential damage that a car can inflict on another motorist in case of an accident. The higher the damage, the more the premiums.

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How Much Difference Does Mileage Make for Car Insurance Premiums?

Mileage is one of the biggest factors that auto insurance companies look at before deciding how much premiums you should be paying them. For first-time car owners, the mileage may not be as crucial in determining their insurance premiums. However, the insurance company will still ask you to estimate the mileage that you expect to cover in your new car. Keeping your guess as accurate as possible can save you from paying high premium prices.

For experienced car owners, mileage can be pivotal when it comes to their car insurance rates. Generally, a person who maintains a low mileage in a year will pay less than a person who covers more mileage. Insurance companies will only ask you to provide details on your mileage occasionally. It is important to give them accurate information. It may be tempting to understate your mileage and this is very understandable because auto insurance companies rarely send their personnel to counter check the information that you provide to them.

However, this may come back to haunt you afterward. Suppose you get into an accident, insurance companies will send their representatives to your repair shop. These representatives will aim to ensure that the actual vehicle's mileage tallies with the information that you have been providing to them. If the insurer establishes that the mileage is way above what you've presented, you will be liable for insurance fraud. As a result, you will not receive compensation from the insurer. Save yourself from this trouble by genuinely maintaining a low mileage for your vehicle and accurately reporting your miles.

What Do Insurers Consider As Low Mileage for Car Insurance?

If you cover an average of 25 miles per day, most insurance companies will consider you as a low mileage driver which helps to lower your premiums. Anything under 50 miles per day is typically considered low mileage. However, despite the low mileage, your zip code will still play a critical role in determining the amount of payable premiums. If you live in certain zip codes you may still pay more premiums because of the conditions of such neighborhoods. Some neighborhoods have a higher prevalence of risk for insurance companies. This necessitates the need for higher premiums even if drivers on these neighborhoods cover low mileages per day.

To be safe from the high premiums, you can check out the rates for your zip code. If your current area has high rates and moving is feasible for you, relocating to a more desirable neighborhood could save you in the long run. You could get double the savings by having low mileage on your car and living in a low-risk neighborhood.

Are There Low Mileage Discounts?

Most car insurance companies offer discounts for low mileage drivers. These discounts can vary in their amounts and there is also the possibility that you could be receiving the discount without really knowing it. For instance, an insurer may just decide to give you a low premium based on your low mileage cover without expressly pointing out the discount.

Some insurance companies do not place a lot of value on the driver’s low mileage. They will still charge high premiums regardless. So you need to review your car insurance company's terms and conditions before you expect such favors. By conducting this due diligence, you get to prepare how to pay up and avoid the unnecessary heartaches that result from unrealistic expectations.

Get Car Insurance Today

In most jurisdictions, you cannot drive on the road unless you have an insurance cover. These covers are very essential and will help you to cover repair or medical costs in case you get into an accident. Additionally, they protect your resources. You won’t have to spend anything out of your budget when you encounter an accident if you have a car insurance cover. Get yours today or renew it in case you have an insurance cover already. 

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