Nowadays, there are all kinds of discounts offered by auto insurance companies, including those for good students, for those who have completed a defensive driving course, distant students, as well as discounts for loyal customers.
Driving Less than 5,000 Miles a Year
But, there is one group of drivers that are almost always omitted by insurance providers when it comes to providing discounts. There are a lot of people who drive less than 5,000 miles per year, which is significantly less than the national average of about 12,000-13,000, but they are not appropriately awarded for it by their insurance companies. This seems a bit odd, given that it makes a lot of sense to believe that the less a person drives, the lower their risk of getting into an accident is. But, most insurance companies don’t take this factor into account, and one of the reasons is that in many states, they are not required by law to do that.
On the other hand, insurance providers charge higher rates to high-mileage drivers, acknowledging the fact that with more miles driven comes a greater risk of being involved in a collision, which makes the failure to offer low-mileage discounts that much more surprising.
Other Factors More Important
In general, insurance companies do not consider mileage to be an important factor when determining their customers’ rates, focusing on factors like their driving record, vehicle size, age, credit score, and the area they live in, instead.
Even though various studies show that mileage is closely correlated to the likelihood of filing claims, insurers fail to reward low mileage drivers, mainly because they have concluded that the way a person drives affects the risk of crashes more than how much they drive.
Data Collection
Most insurance companies collect driving data from their customers’ vehicles through optional driving tracker devices, which they mainly use to assess how people drive and whether their driving habits increase the risk of accidents. With the help of these devices, they try to determine whether a driver practices some risky driving behaviors, such as hard braking, late braking, or fast acceleration, putting themselves or other road users at risk. Essentially, insurers believe that driving behavior is a much more significant factor contributing to the risk of accidents than mileage.
One way for low-mileage drivers to take advantage of the fact that they drive less than 5,000 miles per year, is to opt for pay-as-you-go insurance, offered by some companies, which base drivers’ premiums on miles traveled.
In any case, consumer organizations continue to press lawmakers and regulators to start requiring insurance companies to use mileage when setting prices, so low-mileage drivers might get a break in the near future.