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 and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 21, 2020

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Things to Remember

  • If you telecommute or have a shorter than average commute, you can up to 5 percent lower auto insurance rates than average.
  • Of the 22 largest insurance companies in the U.S., 18 offer low mileage discounts.
  • A low mileage discount can mean up to 30 percent off your rates, depending on the company.

If you’ve ever called an insurance company for a quote on auto insurance, you know there are many different factors that affect auto insurance rates. One of the first questions an agent will ask you is how many miles you put on your car every year. You may be wondering, can you cut your auto insurance rates by telecommuting?

If you telecommute, or work from home, your auto insurance rates will be positively impacted. Statistics say the more you’re on the road, the more likely you are to be involved in an accident. Therefore, more driving means higher auto insurance rates

If working from home results in a significant enough decrease in your annual mileage, you could see some significant auto insurance reductions. Read through our guide to better understand why working from home can lead to a decrease in your auto insurance rates, and to learn how to best take advantage of the savings. 

Can’t wait to find your cheaper auto insurance premiums? For affordable auto insurance, enter your ZIP code into our FREE online tool above and get multiple auto insurance quotes so you’ll know how much you might pay for insurance as a telecommuter.

Table of Contents

How does telecommuting affect auto insurance rates?

If you telecommute and are wondering how does annual mileage affect auto insurance rates, the answer might surprise you. Some companies will charge higher rates if you drive more than the national average. 

According to DataUSA, the average commute length is 25.7 minutes, one way. The average American will drive around 14,000 miles per year. However, if you work from home, that number is likely to be much, much lower.  

Auto insurance companies take a number of factors into consideration when adjusting your rates, and as we already noted, commute is one of those.

So what is the best auto insurance if you work from home? It depends on a variety of factors, like your age, driving record, and what state you live in. 

However, to help you estimate how much you might save on auto insurance by telecommuting, take a look at the data in the table below, which shows how your commute can affect your auto insurance rates, all else being equal.

Average Annual Auto Insurance Rates By Commute Length
Insurance Company10 mile commute
(6,000 miles per year)
25 mile commute
(12,000 miles per year)
State Farm$3,175.98$3,344.01
American Family$3,401.30$3,484.88
Liberty Mutual$5,995.27$6,151.63
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As you can see, commuting has some effect on rates. On average, longer commutes mean rates that are about 2.33 percent higher than shorter commutes, though different companies handle commute-based rates differently.

For example, State Farm has the highest average increase in this data set at 5.29 percent higher rates for longer commutes. By contrast, Progressive only increases rates by an average of 0.27 percent for longer commutes.

In addition to lower rates for lower annual mileage, some insurance companies offer low mileage discounts. Take a look at this table to learn more about which of the major companies currently offer this kind of discount.

Low Mileage Auto Insurance Discounts by Company
Insurance CompanyOffers Low Mileage DiscountDiscount Percentage (if available)
21st CenturyNo-
AAAYesNot Available
AllstateYesNot Available
American FamilyYesNot Available
Country FinancialYesNot Available
FarmersYesNot Available
GeicoYesNot Available
Liberty MutualYesNot Available
MetLifeYesNot Available
NationwideYesNot Available
ProgressiveYesNot Available
Safe AutoNo-
State FarmYes30%
The GeneralYesNot Available
The HanoverYesNot Available
The HartfordYesNot Available
TravelersYesNot Available
USAAYesNot Available
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As you can see when you look at the data, we only have the discount percentage information for a few of the companies that offer this type of discount.

You’ll need to speak with your insurance agent to find out exactly what kind of discount you may qualify for if you’re a low mileage driver.

Even if your auto insurance company doesn’t offer a specific low-mileage discount, it’s worth calling them and informing them of the reduced number of miles you’re now driving if you work at home.

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Do you need auto insurance if you telecommute?

Working from home significantly cuts the time you spend on the road, but you’ll still need auto insurance coverage in order to legally drive a vehicle. Just because you don’t commute for work, that doesn’t mean you never drive a car.

According to data reported by the Insurance Information Institute, auto insurance is legally required in 49 states, but 14 percent of American drivers are still uninsured.

The consequences of getting caught drivig without insurance can range from a hefty fine, to getting your license and registration revoked, and even potential jail time. 

Even if you’re a telecommuter, you don’t want to get caught driving without insurance on your way to the grocery store or while visiting friends or family. Make sure you have an active auto insurance policy that meets the minimum insurance requirements for your state.

What are those requirements? Find the details about the legal auto insurance minimums in your state in the table below. 

Auto Insurance Minimum Legal Requirements by State
StateMinimum BI & PD Liability LimitsRequired Insurance Policies
Alabama25/50/25BI + PD Liability
Alaska50/100/25BI + PD Liability
Arizona15/30/10BI + PD Liability
Arkansas25/50/25BI + PD Liability, PIP
California15/30/5BI + PD Liability
Colorado25/50/15BI + PD Liability
Connecticut25/50/20BI + PD Liability, UM, UIM
Delaware25/50/10BI + PD Liability, PIP
District of Columbia25/50/10BI + PD Liability, UM
Florida10/20/10BI + PD Liability, PIP
Georgia25/50/25BI + PD Liability
Hawaii20/40/10BI + PD Liability, PIP
Idaho25/50/15BI + PD Liability
Illinois25/50/20BI + PD Liability, UM, UIM
Indiana25/50/25BI + PD Liability
Iowa20/40/15BI + PD Liability
Kansas25/50/25BI + PD Liability, PIP
Kentucky25/50/25BI + PD Liability, PIP, UM, UIM
Louisiana15/30/25BI + PD Liability
Maine50/100/25BI + PD Liability, UM, UIM, Medpay
Maryland30/60/15BI + PD Liability, PIP, UM, UIM
Massachusetts20/40/5BI + PD Liability, PIP
Michigan20/40/10BI + PD Liability, PIP
Minnesota30/60/10BI + PD Liability, PIP, UM, UIM
Mississippi25/50/25BI + PD Liability
Missouri25/50/25BI + PD Liability, UM
Montana25/50/20BI + PD Liability
Nebraska25/50/25BI + PD Liability, UM, UIM
Nevada25/50/20BI + PD Liability
New Hampshire25/50/25Financial Responsibility only
New Jersey15/30/5BI + PD Liability, PIP, UM, UIM
New Mexico25/50/10BI + PD Liability
New York25/50/10BI + PD Liability, PIP, UM, UIM
North Carolina30/60/25BI + PD Liability, UM, UIM
North Dakota25/50/25BI + PD Liability, PIP, UM, UIM
Ohio25/50/25BI + PD Liability
Oklahoma25/50/25BI + PD Liability
Oregon25/50/20BI + PD Liability, PIP, UM, UIM
Pennsylvania15/30/5BI + PD Liability, PIP
Rhode Island25/50/25BI + PD Liability
South Carolina25/50/25BI + PD Liability, UM, UIM
South Dakota25/50/25BI + PD Liability, UM, UIM
Tennessee25/50/15BI + PD Liability
Texas30/60/25BI + PD Liability, PIP
Utah25/65/15BI + PD Liability, PIP
Vermont25/50/10BI & PD Liab, UM, UIM
Virginia25/50/20BI + PD Liability, UM, UIM
Washington25/50/10BI + PD Liability
West Virginia25/50/25BI + PD Liability, UM, UIM
Wisconsin25/50/10BI + PD Liability, UM, Medpay
Wyoming25/50/20BI + PD Liability
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If you rarely drive, you may be able to get away with purchasing a very basic policy that only meets the minimum requirements of your state. 

You can also purchase a pay-per-mile policy, which will offer the same protections but charges you based on how many miles you drive per day. Keep reading to learn more about pay-per-mile auto insurance and determine if it is the right option for you. 

What is pay-per-mile auto insurance?

Pay-per-mile auto insurance is another option for reducing your rates if you work from home. Essentially, you can purchase liability, comprehensive, and collision coverage for rates that are based on the exact number of miles you drive.

For this type of policy, the insurance company will charge you a very low monthly base fee. Then you’ll pay a certain amount for each mile you drive per day, usually it’s only a few pennies. However, the specifics will change depending on what company you use. 

Even if you purchase a pay-per-mile policy, other factors besides the number of miles you drive will affect your base insurance rate, like your age, ZIP code, and driving record. However, because you’re also being charged based on how far you drive per day, your rates will vary from month-to-month.

Currently, Nationwide, Allstate, Mile Auto, and Metromile offer this kind of coverage.

See more details about pay-per-mile programs currently on the market in the table below.

Pay-Per-Mile Program Details by Insurance Company
Insurance CompaniesLow-Mileage Program NameDevice UsedEnrollment Discount (Maximum Possible % Savings)Earned Savings (Maximum Possible % Savings)
AAAAAADriveMobile App15%30%
AllstateDrivewiseMobile App10%30%
American FamilyKnowYourDrivePlug-in5%20%
EsuranceDriveSenseMobile App5%30%
Liberty Mutual/SafeCoRightTrackMobile App or Plug-in5%30%
MetLifeMy JourneyPlug-in10%30%
ProgressiveSnapshotMobile App or Plug-inaverage of $2520%
Mile AutoMile AutoNeitherN/A40%
State FarmDrive Safe & SaveMobile App or Plug-in5%50%
The HartfordTrueLanePlug-in5%25%
TravelersIntelliDriveMobile App10%30%
MetromileMetromileMobile AppN/A60%
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There are a lot of different pay-per-mile policy options for drivers to chose from when it comes to auto insurance; work from home and save money is a combo that cannot be beat.

Just be mindful of what information the pay-per-mile trackers are collecting from you. Some companies only track the number of miles you drive. However, others will also look for how fast you drive, where you go, and other personal information. 

Before signing your name on any dotted lines, make sure you are comfortable with all of the information you are sharing with the insurer.

As an example of how pay-per-mile policies work in the real world, watch the video below to learn more about Metromile’s program.

Pay-per-mile insurance policies are relatively new, and are only just now starting to be available in most states.

You will need to speak with a licensed insurance agent in your area to find out if this type of auto insurance policy is available to you. 

How to Ask Your Boss if You Can Work from Home

If your company doesn’t currently have any telecommuters, you can professionally request a work from home schedule with your boss. You can suggest working from home on a trial basis so your supervisor and company can gain assurance that it won’t affect your productivity. 

Be sure to mention how the company can benefit through reduced overhead and decreased carbon emissions. Some bosses respond well to data and factual evidence. 

If your job prohibits your working from home all the time, you can talk to your boss about the possibility of working from home just one or two days a week.

If these suggestions do not convince your boss to let you work from home, keep an eye out for other telecommuting employment opportunities. 

If remote work is simply not an option for you, just remember that driving less miles per year can lower your auto insurance rates, as long as you keep your insurer accurately informed about your annual mileage. 

Can I lower my auto insurance rates if I’m unemployed?

It may be possible to reduce your insurance rates during periods of unemployment. However, some companies increase rates subtly if you are unemployed or a stay-at-home parent. 

Watch the following video from Denver7 news to see how your employment status can change your insurance quotes. 

If you’re unemployed, consider comparing rates from companies that do not ask about your work status. Also remember to inform your insurance agent that you drive less than average. 

Even if you’re driving to and from job interviews, it’s likely you’re on the road less frequently than if you’re driving to and from work every day.

You can also talk to your insurance company to see if they’re willing to reduce your rates temporarily while you search for work. Better yet, try to find a job that will allow you to work from home and keep those lower rates permanently.

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Cut Your Auto Insurance Rates by Telecommuting: The Bottom Line

If you telecommute, make sure you’re getting the cheap auto insurance rates you deserve. You can either switch to a pay per mile insurance program, or recieve low-mileage discounts for a traditional policy.

There are a few things to keep in mind when considering auto insurance and work from home jobs:

  • More and more companies are allowing employees to work from home. 
  • Some insurance companies offer special telecommuter rates for those who work from home.
  • Low-mileage discounts and pay-per-mile policies can help you lower your auto insurance rates.

Now that you know you could save some money by working from home. If telecommuting is an option for you, be sure to inform your insurance company so you can take advantage of the savings. 

Frequently Asked Questions: Cut Your Auto Insurance Rates by Telecommuting

Do you still have questions about auto insurance rates when you telecommute? Read through these frequently asked questions to learn even more.

#1 – What are the best auto insurance companies?

The answer to this depends on a number of factors, including your personal insurance needs, your age, where you live, and who else might be on your policy. However, comparing rates from the top auto insurance companies is a good place to start. 

You can get quotes online to easily get started. Enter your ZIP code into one of our online tools to get quotes right now, or you can speak to insurance agents to find a policy that meets all of your needs.

#2 – How do I find the cheapest insurance?

The best way to find affordable auto insurance is to shop around and compare quotes. You should also do what you can to keep your rates low by driving safely and following the rules of the road.  

Are you ready to buy auto insurance? Don’t wait to get the best telecommuting auto insurance rates; simply enter your five-digit ZIP code into our FREE quote tool below to get started.