Television is full of commercials promising to save you money on auto insurance. But you don’t need a TV commercial to teach you how to save cash on your auto insurance – it’s an easy-to-do exercise you can master yourself in no time. Take low-mileage auto insurance discounts, which some major insurance carriers apparently don’t want you to take.
Low-mileage discounts are pretty much self-described – the less you drive, the less you should pay for auto insurance (primarily because it makes you a lower risk for a an accident.)
While some carriers, and some U.S. states, make sure you have access to low-mileage discounts, some major carriers try to make it difficult.
Not all carriers offer a low-mileage discount on auto insurance
A 2015 study from the Consumer Federation of America states that three of the five largest U.S. auto insurance carriers – Farmers, Progressive and Allstate – don’t offer low mileage discounts to customers, even as 61% of respondents said that it was “fair” for auto insurers to use mileage in pricing auto insurance. State Farm was the only carrier that made low-mileage discounts a priority.
Some states, like California, make it mandatory for insurers to offer mileage discounts to consumers. But most don’t.
“The failure of most large insurers to adequately reward low mileage especially harms lower income and older drivers because they drive the least,” says Stephen Brobeck, CFA’s executive director. “This lack of concern for mileage, along with an emphasis on other non-driving factors such as occupation and income, help explain why insurers charge many lower income drivers such high prices for minimal, state-required liability coverage,” he added.
The issue isn’t just a monetary one for auto insurance consumers; it’s a health, environment and safety issue, too. “If insurers were to properly reward consumers for less driving, that would not only lessen their auto insurance costs, but also reduce the number of uninsured motorists, accidents, air pollution and the impact on global warming,” notes. J. Robert Hunter, CFA’s Director of Insurance and former Texas insurance commissioner.
3 ways to get a low-mileage discount on auto insurance
As an auto insurance consumer, you have more leverage with low mileage discounts than you think. Here are three tips for grabbing a low-mileage discount.
1. Think carpools, transit, cycling. Auto insurance consumers should do all they can to push for low-mileage discounts, and ask their carriers specifically for such discounts. Most policies define low mileage as between 7,500 and 15,000 miles annually. Consumers can lower their mileage taking simple steps like car pooling to work or hopping on public transportation. Biking and walking works, too.
The savings mount up when you do so. SafeCo, for instance, offers up to 20% off auto insurance for low-mileage, while discounts of 15% are common, if you keep below prescribed mileage limits.
2. Drive safely. Driving safely can help produce that low mileage discount, too. Conversely, if you have a history of being in an accident, you may have a uphill climb.
“Getting a low-mileage auto insurance discount might seem as simple as telling your insurers that you drive far less than the national average, but this is not enough to guarantee a discount,” notes Sam Williamson, a compensation specialist with U.K.-based Accident Compensation. “After all, the main reason that insurers offer a discount for drivers who rarely use their car to travel long distances is because they are less likely to have an accident, so if you have previously been involved in an accident, it will be next to impossible to ensure a low-mileage discount.
“The best way to guarantee a low-mileage discount would be to concentrate on how safely you are driving rather than how far,” Williamson adds.
3. Speak up. Of course, simply asking for a low-mileage driver discount is a good idea, too.
“I have a low-mileage auto insurance discount from State Farm,” says Jim Wang, a personal financial correspondent with WalletHacks.com. “I work from home, and thus don't drive any miles for work or school, and they gave me in the neighborhood of 5-10% off our premiums.
“But they keep track,” he adds. “Every year they send us a letter asking us for an odometer reading.”