Auto Insurance for Limited Use

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Things to remember...
  • If you limit your vehicle usage, you could save money on your auto insurance premiums 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

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 the evening.

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, it could benefit you each time that you pay your insurance premiums.

Compare car insurance rates to find the best price for the coverage you need.

Here’s how limiting your driving can lower your rates:

Insurance Carriers Want to Know How Much You Drive Each Year

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You’re asked so many different questions when you’re soliciting insurance quotes.

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 mileage is taken into consideration is because 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.

How does mileage have a direct affect 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 premiums 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.

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

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 low-mileage 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.

Commuting in Your Car Poses More Risk

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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 car insurance rates are.

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

  • Statistics show that 16 percent of fatalities happen during the peak commute times of three p.m. and six p.m.
  • One in four accidents happen during rush hour
  • 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

What is the difference between usage discounts and usage-based 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.

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 how limiting your usage affects your car insurance rates.

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