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Have low mileage? You may qualify to pay 27% less for auto insurance

Fact-checked with HomeInsurance.com

Article Highlights

Your odds of getting in a car accident might be higher than you care to consider. Ultimately, the more time you spend on the road, the greater your risk for being involved in an auto accident. 

Auto insurance providers know this — and companies adjust your auto insurance premiums accordingly. If you’ve ever seen your rate climb after accepting a job with a further commute, those extra miles driven are to blame. 

As Scott Holeman, Media Relations Director at the Insurance Information Institute (III), explains,

“The more miles you drive, the more chance for accidents, so you’ll pay more if you drive your car for work or use it to commute long distances. If you drive only occasionally — what some companies call ‘pleasure use’ — you’ll pay less.”

In short, if you want to save on your auto insurance costs, look for ways to reduce the number of miles you cover in any given time period. 

But how much savings can you expect? We conducted this study to find out. Since the average driver is paying more than $1,500 a year for their coverage, even a small percentage of savings can add up quickly. 

To give you an idea of what you can save, we compared rates at more than 80 insurance carriers based on mileage driven. We looked at all 50 states and Washington, D.C., comparing the national average for annual mileage (around 12,000 miles a year) against higher and lower annual mileages. 

Ultimately, we found that in some states, you could save hundreds of dollars a year by driving less. In others, the savings are minimal. 

Your savings will vary based on your insurer, too.

“Some companies offer discounts to motorists who drive a lower-than-average number of miles per year,” Holeman explains.

“Low mileage discounts can also apply to drivers who carpool to work. Be sure to discuss this with your insurance professional,” he advises.

Before you hop on the phone with your agent, it can be helpful to know roughly how much your mileage affects your premiums based on your state. So let’s take a look. 

Annual mileage impact on rates by state

Let’s say you drive between 12,000 and 14,000 miles a year, in line with the average annual mileage for households across the country. How much do you stand to save by dropping your mileage down to 10,000? What about even further?

We’d love to give you a clear-cut, universal answer, but it all depends on your state. Each state has a specific way they regulate insurance premiums. In California, for example, Proposition 103 mandates that insurance carriers have to heavily weigh your safety record and annual mileage in determining your rates. So if you’re driving fewer miles in the Golden State, you can expect to see some serious savings. We’re talking discounts of 27% (or $500) for the average driver who reduces their annual mileage from 12,000 miles a year to 2,000.

In North Carolina, on the other hand, rates are set by the state’s Rate Bureau. That means that insurance carriers have less wiggle room to offer discounts, and you might see next-to-no savings even if you reduce your mileage. Mike Causey, North Carolina Commissioner of Insurance, says,

“In North Carolina, mileage driven is not a primary factor. However, insurance companies have programs where they can give discounts to safe drivers and those who drive fewer miles. Those are incentives for people to change their driving habits.” 

While your insurance provider might be able to offer you savings tied to fewer miles, you’re probably not going to see a direct drop in your premium if you cut your annual mileage. In fact, we found that driving less doesn’t move the needle on your insurance cost at all in North Carolina. The good news is that driving extra doesn’t typically increase rates either.  

Because each state is doing things a little bit differently as far as insurance ratings go, it’s helpful to look at the numbers in your home state. 

Full coverage rates by annual mileage

State2k2k vs 12k12k20k12k vs 20k
Alabama$1,284-8%$1,389$1,4122%
Alaska$1,541-5%$1,616$1,6241%
Arizona$1,340-6%$1,431$1,4612%
Arkansas$1,342-5%$1,417$1,4392%
California$1,364-27%$1,864$2,23020%
Colorado$1,507-5%$1,591$1,6111%
Connecticut$1,591-4%$1,658$1,6580%
Delaware$1,597-5%$1,681$1,686<1%
Florida$2,509-4%$2,624$2,6431%
Georgia$1,552-7%$1,675$1,6991%
Hawaii$1,023-3%$1,060$1,0661%
Idaho$909-5%$957$9691%
Illinois$1,313-4%$1,366$1,3841%
Indiana$1,076-4%$1,120$1,1291%
Iowa$930-4%$973$9942%
Kansas$1,342-8%$1,463$1,4811%
Kentucky$1,587-6%$1,694$1,7161%
Louisiana$2,357-8%$2,562$2,6172%
Maine$564-7%$606$6091%
Maryland$1,735-9%$1,897$1,9292%
Massachusetts$1,299-8%$1,405$1,4423%
Michigan$2,617-2%$2,663$2,6781%
Minnesota$1,375-6%$1,459$1,4872%
Mississippi$1,484-7%$1,591$1,6031%
Missouri$1,454-5%$1,529$1,6216%
Montana$1,091-7%$1,174$1,178<1%
Nebraska$1,128-4%$1,171$1,1771%
Nevada$2,099-3%$2,164$2,2142%
New Hampshire$1,095-2%$1,122$1,1220%
New Jersey$2,071-1%$2,096$2,105<1%
New Mexico$1,211-7%$1,304$1,3181%
New York$2,806-7%$3,017$3,024<1%
North Carolina$1,2160%$1,216$1,2160%
North Dakota$1,099-2%$1,116$1,121<1%
Ohio$884-5%$929$9522%
Oklahoma$1,499-6%$1,592$1,6091%
Oregon$1,140-7%$1,226$1,2492%
Pennsylvania$1,175-9%$1,288$1,3263%
Rhode Island$1,659-6%$1,764$1,772<1%
South Carolina$1,239-8%$1,340$1,3581%
South Dakota$1,319-3%$1,359$1,3872%
Tennessee$1,060-8%$1,147$1,1793%
Texas$1,940-4%$2,011$2,0231%
Utah$1,096-5%$1,157$1,1772%
Vermont$758-6%$810$8151%
Virginia$962-9%$1,060$1,0862%
Washington$979-7%$1,056$1,060<1%
Washington D.C.$1,672-5%$1,762$1,7620%
West Virginia$1,402-4%$1,462$1,5456%
Wisconsin$943-4%$984$1,0022%
Wyoming$1,202-2%$1,226$1,2341%
National average$1,581-9%$1,735$1,8104%

Quadrant Information Services, 2020

Top 5 states where drivers have the highest premium impact from reduced annual mileage: 12k to 2k per year

StateSavings %Savings $
California27%$500
New York7%$211
Louisiana8%$205
Maryland9%$162
Georgia7%$123  

Quadrant Information Services, 2020; annual mileage discount applied to rates for 2k miles

Top 5 states where drivers have the least premium impact from reduced annual mileage: 12k to 2k per year

StateSavings %Savings $
North Carolina0%$0
North Dakota2%$17
Wyoming2%$24
New Jersey1%$25
New Hampshire2%$27  

Quadrant Information Services, 2020; annual mileage discount applied to rates for 2k miles

Top 5 states where drivers have the highest premium impact from increased annual mileage: 12k to 20k per year

StateIncrease %Increase $
California20%$366
Missouri6%$92
Louisiana2%$55
Pennsylvania3%$38
Massachusetts3%$37  

Quadrant Information Services, 2020

Top 5 states where drivers have the least premium impact from increased annual mileage: 12k to 20k per year

StateIncrease %Increase $
Connecticut0%$0
New Hampshire0%$0
North Carolina0%$0
Washington D.C.0%$0
New York<1%$7  

Quadrant Information Services, 2020

How to apply the annual mileage discount

If you’re living in a state where lower-than-average annual mileage can help keep more money in your pocket, you’re probably wondering how to apply this discount to your auto insurance policy. 

The first step is to calculate your annual miles driven. You can do this in several ways. 

Manually calculating annual mileage

One option is to start a new trip meter. It can be helpful to start it at the beginning of a time period that’s easy to track, like a new month. 

It’s not necessary to track your mileage for the whole year to calculate your annual mileage. You can get a fairly accurate picture by using your trip meter for three months, then multiplying that by four. 

Alternately, you can keep a journal of your odometer reading each time you get your oil changed. If you know roughly how many times you get your oil changed each year, you can multiply that number by the miles you drive between changes. 

If you’re calculating your mileage annually, don’t forget to factor in any outlying driving factors. If you take an annual road trip across the country, for example, make sure to include that mileage in your estimate.  

Using technology to track your mileage

Some insurance companies offer telematics devices, or technology you use in your car to track mileage and driving behaviors.  

And this type of technology is on the rise, according to Holeman; “A growing number of insurers are offering more complex programs that take driving behavior into account. These use telematic devices to relay information about when and how the car is being driven. Various data-collection mechanisms exist, including smart phone apps and plugged-in or hard-wired devices.” Ask your insurance company if they have a device or app you can use to track your annual miles.

Applying the discount to your policy

Whether you manually calculate your annual mileage or you use tech to do it for you, you want to be sure that discount is applied to your policy and stays there. 

Talk with your insurance agent to get the discount applied. Usually, this discount can be applied for any driver who doesn’t drive more than average, even expensive-to-insure teen drivers

Be prepared to have the discount reevaluated regularly. Each time you renew your policy, you may be asked to update your provider on your current annual mileage. And if your driving behavior changes —  for example, you accept a job with a longer commute — get in touch with your insurer to update your policy.

It might mean losing your discount, but it can save you a huge headache. “I think it’s very important for people to get in touch with their insurance agent and be honest with their agent about how much mileage they drive,” Causey says. If you don’t accurately report your mileage — something your insurer can easily find out by checking your odometer if you have to file a claim — you could be charged with insurance fraud, he says. 

Additionally, if you report a low mileage, some insurers may ask for periodic mileage checks on your vehicle to verify that you’re still eligible for that discount. If you have a telematic device tracking your miles driven, there’s no hiding extra miles from your insurer.

Be honest about your mileage driven, but don’t hesitate to ask your insurer how you can save if you drive less than 12,000 miles a year. 

Ways to reduce annual miles driven

One of the best ways to reduce the number of miles you drive each year is to minimize your individual commuting miles. That could mean carpooling, biking or bussing to work or working from home. 

This time last year, that last option would have seemed like a stretch. But the COVID-19 pandemic has shifted things. More employers are open to long-term, work-from-home arrangements than ever before.

“I’ve talked to people that have reduced their miles driven for work by 75%,” Causey says. “People have told me they’ve changed their driving behavior forever because of the coronavirus.”

In short, our top tips to reduce your annual miles driven include the following:

  • Evaluate and adjust your commute by carpooling, biking, taking public transportation or working from home.
  • Look for closer-to-home places to meet your needs. Check out the gym up the street or the mom-and-pop market around the corner so you don’t need to use your car for basic errands.
  • Shift your vacation plans. Choose nearby locations or use alternative forms of transportation to get to your destination.
  • Batch your trips. If you know you need to drive across town for an appointment, run all of your errands in that area while you’re there. 
  • If you have kids, connect with parents at their school and in their extracurricular groups and set up a carpool rotation (you’ll save yourself a bunch of time this way, too).
  • Walk and bike more when you have the option, instead of driving. You might be surprised how good it feels to get a little exercise and fresh air. 

When you reduce your miles behind the wheel, you don’t just potentially lower your auto insurance premiums. You also save money by minimizing your gas usage, and the wear-and-tear on your vehicle. Plus, you reduce your environmental impact, too. 

The takeaway

In the vast majority of states, driving fewer than the nationwide average of 12,000 miles a year can potentially help you score an auto insurance discount. To get this discount:

  • Track your mileage so you can accurately report it to your insurer.
  • Ask if your insurance provider offers an app or in-car device to track your miles driven.
  • Keep your policy updated with your current ballpark mileage to ensure you get the discount when applicable but don’t risk insurance fraud. 

If you have any questions about how your annual mileage impacts your premiums, reach out to your insurance agent. They should be able to give you a clear idea of how much you can save by driving less and the best way to make sure that discount is continually applied to your policy. 

Methodology

Coverage utilizes Quadrant Information Services to analyze quoted rates from thousands of zip codes across all 50 states including Washington D.C. Quoted rates are based on the profile of a 30-year-old male with a clean record driving a 2016 Honda Civic. The driver had the following coverage details:

  • $100k bodily injury liability per person
  • $300k bodily injury liability coverage per crash
  • $100k property damage liability coverage per crash
  • $500 collision coverage deductible
  • $500 comprehensive coverage deductible

To analyze the impact of mileage on auto insurance rates, we compared rates for the profile driving 2,000, 12,000 and 20,000 miles per year. 2,000 mileage rates were compared with the annual mileage discount applied.

Kacie Goff

Kacie Goff is an insurance writer for Coverage.com. She loves taking complex concepts and distilling them down to make it easier for people to understand their coverage options. Over the last five years, she’s written about personal and commercial coverage for Bankrate, Freshome, The Simple Dollar, local insurance providers and more.

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