Every year you might receive the following question from your auto insurance provider: How much are you driving per year? Most people have no real idea how many miles they put on their vehicle from one year to the next. But it is a good idea to monitor this.
Knowing this information could help you make better decisions about your car insurance coverage. In fact, it may even lower your costs. How does mileage matter to insurance companies?
How Mileage Correlates With Costs
With auto insurers, the choice of how much to charge you comes down to the amount of risk you present to the company. Those who drive more miles tend to be more likely to be in an accident. Just like anything else, the more often you engage in it, the more risk is present. Therefore, if you drive a lot of miles each year, you may be more likely to file an auto insurance claim.
But, those who drive less pose less risk. Perhaps you use a Rideshare company most of the time. Or maybe you use rapid transit. Or you may be one of the many people who love biking or walking. These scenarios can impact your insurance premiums.
If you drive under 12,000 miles a year, you may qualify as a low mileage driver. This amount can differ from one insurer to the next. Low mileage drivers may qualify for a low-cost policy that provides all the coverage they need.
How To Track Your Miles
If you stick with the same insurance company year after year, they are likely to maintain a record. They may ask you what your mileage is each year before renewing your policy.
If you switch companies, gather information as best you can. It is important to be accurate. Do not tell your agent you are a low mileage driver if you plan to drive significantly more. This may cause a limitation on your coverage. Some insurers may even drop coverage if they feel dishonesty occurred.
You can also track your mileage using an app or a small notebook. Some drivers do this for tracking their oil changes or other maintenance.
No matter which method you use, aim to be as accurate as possible. You want your auto insurance policy to cover all your risks. Be sure your car insurance always matches the way you use your vehicle. If you change this through the years, be sure to let your Auto Insurance Discounters agent know. They need to update your policy to reflect the difference.