When To Consider A Low Mileage Car Insurance Policy

With gas prices on the rise and the economy struggling to right itself, many auto insurance companies have taken to offering consumers discounts if their car is driven as few miles as possible in a year. For some, this can result in significant savings.

When an auto insurance quote is first given, it assumes an "average" number of miles driven in a year, typically in the nature of 15,000. In many states, it is this number, more so than the age of the car or driver, that determines the basic price of the insurance policy. As consumers become more market-savvy and look for ways to decrease the amount of bills they are paying each month, insurance companies have taken to offering discounts to those who drive their cars a reduced number of miles. This benefits both parties - the insurance company has a lower-risk vehicle to insure, as less time on the road means less chance of an accident, and the driver has a cheaper policy.

Although the discounts vary by provider, there are now a number of programs in place to help offset the cost of insurance. GMAC Insurance Corporation, for example, has been offering reduced rates since 2007 for those of its customers who drive less than 15,000 miles per year. These clients save 54% on their annual insurance policy. In some states, insurance companies ask individuals to install monitoring devices in their cars, which will record the number of miles driven. The lower the total, the lower the insurance premium paid. For many insurance companies, it is simply a matter of falling into a lower "bracket" of mileage. A car that is designated as being driven to work every day will have a higher premium than one that is used simply for driving on the weekends and for pleasure.

For those motorists that have a job very close to home, or have recently seen a change in their driving habits, it can be worthwhile to contact the insurance company and ask if they can reduce the current premium from that given in their original car insurance quotes. Be leery, however, about supplying exaggerated information to the insurance company. If a vehicle is deemed as a pleasure only, but has an accident while being driven to work, problems could result if the insurance company can prove it. This could lead to a lack of coverage or no payout at all, depending on the circumstances. Further, it would make all future auto insurance quotes far higher, as once an insurance company feels it has been duped, it will be unlikely to continue with the current policy, and even if it does, it will be at substantially higher rates.

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