Low Mileage Car Insurance
Would you look at your car insurance differently if it was a variable cost with your bill based on how often you drive? Limited or low mileage car insurance is a great way to save money on car insurance every month. With the advancement of technology it is much easier to match your pricing with how many miles you actually drive. This is a big improvement from the past when car insurance companies would ask if you drive more or less than a certain mileage level, such as 12K miles per year. The best way to take advantage of low mileage driving is by participating in a usage based program. Below is a review of how usage based insurance works, the companies and states the programs are offered as well as further tips on how you can save money on car insurance as a low mileage driver.
What is Usage Based Insurance? (UBI)
Depending on the state you live in and company you look at there will be differences to how usage based insurance works. In most instances, a car insurance company will provide a device you plug into your car. The device can be used to track the miles you drive, what time of day you drive, braking frequency and the speed you are driving. It is up to the car insurance company to decide which factors they want to use. Below is a review of what companies offer a usage based insurance program and factors they use. The most important factor usage based insurance companies use is how many miles you drive. Usage based insurance is an excellent way to reward low mileage drivers as well as provide an incentive to drive even less.
How Do I Find The Best Low Mileage Company?
If you are driving less than national average, around 13K per year, there is a good chance you are paying to much for car insurance if you are not participating in a usage based insurance. The companies offering a usage based program claim savings can be anywhere from 20-50%. How can you find the best company and pricing for usage based car insurance?
- State Regulation – Since car insurance is regulated by the state you want the usage based company to have approval to vary pricing based on miles driven. Below is a sample of usage based programs offered in the US. The list may vary, so it is a good idea to verify directly with the company.
- Review your annual mileage – Do a quick check on how many miles you drive in a typical month and multiple by 12. It also makes sense to see if there are other ways to lower your miles. Can you take public transportation, share a ride or work from home more frequently? Would it be worth a couple hundred dollars to cut your mileage down? How about the additional savings in paying less for gas? Knowing your required mileage will help you compare car insurance companies on an even field as well as review the benefit of driving fewer miles.
- Review Full Coverage Needs – It is a good idea to review coverage levels to make sure they are aligned with your needs. Maybe the last time you signed up for car insurance you were carrying fewer assets and didn’t have as much to protect. In addition, it is a good time to see if you can combine insurance policies. Are there multiple cars you need to insure? Do you have a policy for your home? Having your policies with 1 company will make it easier to track as well as save money.
- Select & Compare – Once you have a couple of companies, follow up directly and see which company is a better fit. Obviously, pricing should be a primary factor in your decision. In addition, consider what device will be used to track driving data and the type of driving information that will be tracked(Miles, braking, speed, time of driving). The review below has details on typical information tracked by different usage based companies.
How Is Low Mileage Pricing Done?
Each usage based company will have their own method to discount for low mileage drivers. Progressive will ask you place their tracking device in your car for 30 days and then discount your policy after this period. In addition they will ask to track your driving data for 6 months and after the 6 months will no longer require to track your driving. GMAC will utilize the vehicle diagnostic reports from Onstar and will monitor your mileage on a monthly basis. Along with the data captured, a usage based company will combine with other information, such as your driving record, car being used and where you live, to come up with your premium.
Low Mileage Tips – No Usage Based Program
What happens if there are no usage based insurance companies in the state I live? Maybe none are available as you don’t drive a car with Onstar, as this is required in some situations. With the growth in usage based insurance chances are good you will have more options in the near future. To benefit as a low mileage driver, pay attention to how companies ask for your mileage. When asking for a quote, are you being asked how many miles you drive? Are there only a couple choices to select on your mileage, such as more or less than 10K miles a year? Shop around with web sites that allow you put into your exact mileage and don’t work in large bands. An independent web site that asks for your mileage is Hometown quotes.
Usage Based Car Insurance Companies
Below is a review of some of the usage based car insurance companies. The details of how data is tracked may differ from state to state. For instance, Progressive may track 2-3 variables in one state and track more variables in another state. It is best to check with the company directly to verify exactly how their programs operate in the state you live in.
Progressive – Snap Shot
Progressive has the largest geographic presence in the US offering their snapshot program in 40 states (see below). Snapshot works by plugging in a device to your dashboard that provides data on speed, time of day and number of miles a car is being driven. Snapshot doesn’t have GPS, so information is not collected on your location. Progressive claims drivers can save around 30% by utilizing this low mileage program.
GMAC – Low Mileage Discount
GMAC is the second largest provider of low mileage insurance programs offering their programs in 35 states (see below). GMAC is available to General Motors customers with OnStar. With this program only your mileage is tracked. All of the mileage information comes from the Onstar Diagnostic reports. GMAC claims savings of over 50% by switching to the program for drivers who drive less than 15K annual miles. The greatest savings of over 50% relate to annual mileage between 0-2500k a year.
State Farm – In-Drive, Safe & Save
State Farm has 2 programs in a total of 5 states. The In-Drive is available in Illinois and proclaims savings up to 50% by utilizing a device to track mileage, turning, speed, braking and time of day. In addition, State Farm offers Drive Safe & Save in California, Colorado, Ohio and Texas. In California, State Farm allows customers to use an Onstar equipped vehicle or to report odometer readings prior to each 6 month policy period.
Allstate – DriveWise
Allstate’s DriveWise program is currently offered in 3 states, Illinois, Ohio and Arizona. A device is plugged into your car to help gauge the time of day you drive, miles driven, hard braking, rapid acceleration and speed. Allstate claims savings of up to 30% by switching to their usage based insurance program.
Travelers Intellidrive is offered in 4 states, Oregon, Virginia, Ohio and Illinios. Travelers offers an immediate discount of 5% for signing up and an additional 20% when you renew based on the level of miles you drive. Travelers uses an device that you plug into your car that measures miles driven, speed and location.
|State||Usage Based Programs|
|•Arizona||Progressive, GMAC, Allstate|
|•California||State Farm, Automobile Club, Sequoia|
|•Colorado||Progressive, GMAC, State Farm|
|•Illinois||GMAC, Allstate, State Farm, Travelers|
|•New Hampshire||Progressive, GMAC|
|•New Mexico||Progressive, GMAC|
|•New York||Progressive, GMAC|
|•North Carolina||None noted|
|•Ohio||Progressive, GMAC, Allstate, State Farm, Travellers|
|•Oregon||Progressive, GMAC, Travellers|
|•Rhode Island||Progressive, GMAC|
|•South Carolina||Progressive, GMAC|
|•South Dakota||Progressive, GMAC|
|•Texas||Progressive, GMAC, State Farm|
|•Virginia||Progressive, GMAC, Travellers|