Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jul 16, 2020

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Things to remember...

  • If you limit your vehicle usage, you could save money on your auto insurance rates for the entire term
  • Insurance companies ask you how long your commute is and how much you’ll drive annually to determine rates
  • Drivers who only use their vehicle for trips to run errands or recreational drives will pay a pleasure usage rate
  • If you’re the only driver in the home and you own two cars, the extra car’s rate could be lower than the primary one
  • Some carriers offer usage-based insurance rates to their clients who are willing to have their driving monitoring

Auto insurance for limited use can be much cheaper than normal. Restricted-use auto insurance is a good choice for those drivers who have a short commute, work from home, or only driver for pleasure.

The average commute in the United States is 25 miles and lasts 45 minutes during peak commuting hours.

Commuting by car has been the most popular mode of transportation for years, but the nation is nearing the end of the car era.

More and more professionals are moving closer to work or choosing to take public transportation instead of driving endless hours in the morning and in the evening.

What is considered low mileage for insurance? Commuters and individuals who drive their vehicle for personal usage drive an average of 29 miles per day. This adds up to about 10,585 miles per year.

If your annual mileage falls well below the national usage average, usage-based auto insurance could benefit you.

Comparing auto insurance quotes is the best way to make sure you are getting great rates, especially if you don’t drive far. Enter your ZIP today to start comparing quotes for restricted-use auto insurance.

Insurance Carriers Want to Know How Much You Drive Each Year

You get asked so many different questions when you’re soliciting insurance quotes. There are many factors that go into determining your auto insurance rates, and this video tells you about some of them.

Since there’s a long list of details that you need to provide, you don’t really question why the details requested are relevant. After all, it’s natural to wonder why you’d pay less if your commute were five miles instead of 20.

The entire reason that annual mileage affects auto insurance is that people who drive more are exposed to more potential accidents.

If you only drive five miles a day, you’ll come across less irresponsible drivers than the average driver who drives 29 miles daily. Since data shows that you’re exposed to more accidents by the mile, rates fluctuate.

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How does mileage have a direct effect on your rates?

Insurance companies have established that the average driver will drive somewhere between 10,000 and 15,000. When you fall into the average, you won’t be penalized for how much you drive but you also won’t receive any credits.

There are higher mileage band classifications and lower ones. Your rates for each car will be credited or surcharged based on the estimates that you give.

If you didn’t fully understand how important it was to give accurate mileage ratings, your information on file could be hurting you. Overestimating mileage means that you could potentially be overcharged.

Luckily, if you say you’re going to drive 15,000 miles for the whole year and that estimate is wrong, you can request that it be changed.

Let’s look at the average annual auto insurance rate based on the commute to see just what a difference your commute can make on your rates.

Average Annual Rates Based on Commute and Mileage
CompanyAnnual Rate for 10 miles commute, 6,000 annual mileageAnnual Rate for 25 mile commute, 12,000 annual mileageAnnual Rate Difference
Allstate$4,841.71$4,934.20$92.49
American Family$3,401.30$3,484.88$83.58
Farmers$4,179.32$4,209.22$29.90
GEICO$3,162.64$3,267.37$104.73
Liberty Mutual$5,995.27$6,151.63$156.36
Nationwide$3,437.33$3,462.67$25.34
Progressive$4,030.02$4,041.01$10.99
State Farm$3,175.98$3,344.01$168.03
Travelers$4,399.85$4,469.96$70.11
USAA$2,482.69$2,591.91$109.22
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The auto insurance rate difference for commutes can be a dollar to over a hundred, depending on your company.

If you need to lower the mileage estimate for a car on your policy, you should call your agent. When the difference is minimal, the agent will process the change with no hesitation.

If, however, you go from driving 15,000 miles per year to 5,000 miles, you may have to provide documentation to show your current odometer reading.

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Insurers Will Offer Discounts to Drivers Who Limit Usage In Other Ways

Let’s look at some steps to lower your rates if you don’t drive a lot of miles.

You don’t necessarily have to be a commuter or a business professional to drive 10 or 20 thousand miles every year.

Some retirees and home-based professionals still spend a lot of their time in their cars going on road trips or enjoying music as they take the scenic route down the coast.

If you don’t limit your usage in a mileage sense, you might qualify for savings elsewhere. In addition to offering limited mileage auto insurance discounts to qualifying drivers, companies will offer discounts to drivers to limit their usage to only driving their personal cars for personal reasons.

Every car will receive a different vehicle usage rating. Companies will assign one of three ratings to the vehicle:

  1. pleasure
  2. business
  3. commuter

Pleasure comes with the lowest rate because it’s the class where the risk measures are lowest. To find out how a car is rated, look at your declarations page and see if it says pleasure, commuter, or business next to the car.

Does commuting in your car pose more risk?

If you have just a small commute, you might wonder why you’re going to pay more than someone who drives a lot of pleasure mileage. The answer is in the risk like most answers pertaining to auto insurance rates are.

Here are a few reasons why people who commute by car are more likely than others to get into an accident:

  • Most accidents occur during rush hour, according to the National Highway Traffic Safety Administration
  • According to the Insurance Information Institute, 36,120 people died from auto accidents in 2019.
  • Drivers are most likely to get into an accident within 25 miles of their home
  • Commuters are often in a rush and are more likely to make risky decisions behind the wheel to get to work on time
  • Commuters drive in stressful conditions rather than leaving their home when they want to

Limiting your commute time will save you in auto insurance rates and lower your chances of being in an accident.

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What is the difference between usage discounts and restricted mileage auto insurance rates?

You can tell your insurer you’re going to limit your mileage and you’re going to drive for pleasure and the insurer doesn’t have a real way to verify the information.

If you slip and admit you were on your way to work when you got into an accident, your claim could be denied, but only if the insurance can prove you were purposely withholding information.

Although the use of auto insurance discounts reduces rates, many people get discounts for usage that they probably shouldn’t be getting.

Some companies are willing to offer even bigger savings to people who apply for a usage-based insurance policy. With this policy, you allow the carrier to monitor your driving with a device.

The rates will go up and down based on how much you drive and how often you drive.

Limiting your driving does pay off in the end. Not just in the sense that you’ll save money on gas, but also because your insurance rates could go down. Get instant online quotes now to see auto insurance for limited use rates.