Several factors come into play when it comes to car insurance. From the kind of car you own to the amount of mileage you drive regularly, many things influence how much you have to pay for your car insurance.
If you’re a low mileage driver, meaning that your car is used less than 50 miles a day, you are in for some good news. Not only are you at reduced risk of getting into accidents, you automatically become eligible for lower insurance rates.
This article will explore some of the reasons why low-mileage drivers often get lower insurance rates.
Before we walk you through why low mileage equals lower insurance costs, let us first understand what it means.
Insurance companies offer their car insurance at discounted prices to drivers who drive their cars sparingly. These discounts are a recognition that lower mileage often correlates with a decreased risk of accidents and insurance claims.
Statistically speaking, low mileage guarantees that the car owner is at reduced risk of getting into accidents, hence the lower insurance premium.
Several factors influence your car’s insurance premiums, and low mileage is one of them. The following are a few reasons why low mileage equals low insurance cost.
As we mentioned before, when driving your car for 25 or 50 miles daily, you are putting yourself at a reduced risk of getting into road accidents. Since car insurance is primarily to cover the costs in case of a mishap, reduced mileage means less time on the roads and fewer risks of accidents.
Insurance providers rely on data and actuarial science to calculate risk. In some cases, telematic devices are fitted inside the car to calculate the reduced mileage and how long the vehicle is on the road daily.
Insurance companies also calculate the premiums not just on a daily or monthly basis but also based on the annual mileage that your car has. This means that the less you drive annually, the lesser your premiums are.
Insurance providers consider annual mileage one of the most significant factors in assessing risk. So, if you use your car occasionally and for random trips, errands, or leisure activities, opting for discounted car insurance is vital.
Again, we have to reiterate that if you are buying car insurance based on your “lower mileage” or “pay as you drive” situation, you’d need to have a telematics device installed in the car. In most cases, the car insurance company will fit the device in your car to keep track. The primary function of the device is to keep track of the mileage you are covering on the road to ensure that you are adhering to the terms discussed with the insurance company.
In Closing: Low Mileage Driving Savings
Being a low-mileage driver comes with a variety of advantages. If you have been looking for ways to reduce your car insurance, reduce the money you spend on fuel, and also do a little better for the environment, low-mileage driving is the way to go. Discussing the best options with your car insurer is vital in such special cases too.