If you own a car but do not drive a whole lot, you might be overpaying for your car insurance if you are not taking advantage of the discounts insurance companies offer for drivers who do not drive a lot. In fact, there are even special types of programs designed for drivers that fall into this category, and here are several important things you should understand about low-mileage drivers and auto insurance.
Insurance Companies Give Discounts for Low Mileage
Almost all insurance companies are willing to give drivers a discount if they do not put a lot of miles on their cars each year. The number of miles insurance companies consider low mileage varies, but this number is usually around 12,000 miles per year or less. Do you drive less than 12,000 miles per year? If so, you probably qualify for a discount. If you are not currently taking advantage of this discount, you may want to contact your insurance company to let them know that you fall into this category.
There is one main reason you can receive a discount if you do not drive a lot. The reason for this is that your risk level drops. Insurance costs are based on a lot of things; however, the risk a driver poses to the insurance company is a huge factor in your costs. A person that drives a lot is considered a higher risk than a person who drives very little. People that drive a lot have a greater chance of getting into accidents, whereas people who do not drive a lot have a lower risk of getting into accidents. If you ever get into an accident and have to file a claim on your auto insurance policy, your insurance company might get stuck with the bill. This is the main reason insurance companies base rates on risk levels.
Some Insurance Companies Offer Alternative Types of Policies
There are also insurance companies that offer alternative types of policies for people who do not drive a lot, and there are two main types you could potentially opt for. The first type is called a pay-as-you-drive policy. With this type, the insurance company will give you a device that you must install in your vehicle. Once installed, this device will monitor your driving habits and will periodically send a report to your insurance company. The device monitors your mileage, how fast you accelerate and stop, and many other factors about your driving habits. Over time, it will show whether you are a safe driver or not, and you may receive discounts if you prove that you drive safely.
The other option you could consider is a pay-per-mile policy. This is a great type of policy to choose if you drive very little each year, like under 5,000 miles. With this option, you can control how much you pay for your car insurance by controlling how much you drive. You will have to pay a certain, set rate for each mile you drive, which means your bills will vary each month. If you drive only a few miles during a month, you will pay very little for your coverage that month. If you drive a lot during a particular month, you will pay more for your insurance that month.
If you are a driver who does not put a lot of miles on your car each year, you should not be paying a lot for your insurance costs. If you feel you are overpaying, you should contact an insurance company of your choice to ask for a free quote for auto insurance.