Understanding Insurance Issues

How The Mileage You Put On Your Car Affects Car Insurance Rates

One of the top ways to save money on auto insurance is by taking advantage of any and all discounts your auto insurance company offers, and this includes a discount for low mileage. Although many people do not realize that the mileage you put on your car affects the rates you pay, this is really true, and here is how your mileage affects the amount of money you pay for auto insurance.

Insurance companies want to know your annual mileage

If you have ever called for an auto insurance quote, the agent you speak to probably asked you a lot of questions, including how many miles you put on your car each year. Your annual mileage is an important factor to the insurance company, as it plays a role in the level of risk you have to them. Many insurance companies even check in with policyholders from time to time to ask them what their odometers say on their cars, and this is to find out if policyholders are being honest about this. Additionally, when you get a new policy, the agent might ask you what your current mileage is, simply to record it in your file.

Your mileage can increase or decrease your risk level

People who drive a lot have a higher risk level than people who drive less. Because of this, insurance companies tend to offer discounts to people who do not drive a lot. Insurance companies often base this factor in a certain mileage amount, such as 7,500 miles, but this amount varies. If you fall below the cut off mark your insurance company has, you will get a discount on your policy, simply because you are of less risk to the insurance company.

When a person drives very little, he or she has a much lower chance of getting in an accident, whereas a person who drives a lot will have a greater chance of getting in an accident. The more you drive, the greater the odds are that you will be involved in an accident. This is why insurance companies want to know about this particular factor when they offer insurance quotes to people.

If you drive very little, you should ask your insurance company about a low-mileage discount. This is a common type of discount most insurance companies offer, and it could help you save some money on your auto insurance. Contact an insurance company like Rowell Insurance Agency to learn more.     


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