Your Daily Commute vs. Higher Car Insurance Rates

We all hate traffic, the long wait that is going nowhere quickly…who doesn’t? But, did you know that the farther your daily commute, the higher your car insurance rates?

It’s a no brainer for car insurance companies. The fewer miles you drive to and from work, the less likely you are to get into an automobile accident – it’s nothing personal. The facts and data speak for themselves.

While insurance rating systems may differ from state to state, as do laws, one standard is common: the number of miles you drive may be used as a rating factor by your insurance company to determine your premium. On the plus side, it can more likely be used as a factor to offer you a discount or lower rate for driving fewer than a specified amount of miles annually.

In addition to other factors such as the year, make, and model of your car, your age, location, driving record, etc., most insurance companies have at least three mileage “tiers” or levels to formulate your policy rates. Some may use a daily mileage or an annual total. In either case, the less you drive the better off your wallet will be.

Because there are variables, check with your insurance company to know if they use a daily or annual mileage formula. If you are currently shopping for car insurance…compare to get the lowest rates possible.

Insurance companies utilizing a one-way commute distance may use the following mileages to estimate your rate. This should only be used as a guide since rates may vary from state to state.

  • Three or fewer miles – This is considered pleasure or leisure driving and should not affect your insurance premium.
  • Four to nine miles – First Tier – Although minimal, expect to pull a few extra dollars out of your pocket every month.
  • Ten to 15 miles – Second Tier – This distance will mean more bucks missing from your wallet and may add up to five dollars monthly.
  • Fifteen to 20 miles – Third Tier – At this distance, you may expect a surcharge of an additional eight dollars per month.
  • Twenty miles or more – The 20-mile mark is the cutoff for most insurance companies, however, if you drive more than twenty miles one way, it could cost you up to ten dollars more per month. On a positive note, a 45-mile commute should run as much as a 21-mile commute, as far as insurance costs are concerned.

If your insurance company uses the annual mileage rating system, you may want to follow a few of the following tips to help reduce your yearly premiums.

  • Reduce unnecessary trips
  • Carpool whenever possible
  • Tele-commute if your employer offers the option
  • Utilize various forms of mass transit where available
  • Combine trips whenever possible
  • Shop closer to home

Obviously, some of these tips may be easier to adapt than others, depending on your situation. But, the bottom line is, if you want to save money on your car insurance, lower the miles you drive. Your wallet will thank you for it. As a matter of fact, why not get a free, no-obligation auto insurance quote today?