If you own a car, you need to carry car insurance on it. However, if you don't drive your car very often, you will want to look into a policy that reflects that fact. You will want to see if you can get a low mileage car insurance policy or get a usage-based insurance policy, instead of a standard car insurance policy.
Type #1: Low Mileage Car Insurance
According to the U.S. Department of Transportation's Federal Highway Administration, the average person drives around 13,476 miles each year or over 1,000 miles per month.
If you drive considerably less than average America, you may qualify for a low mileage car insurance policy. A low mileage car insurance policy is generally offered for people who drive about half as much as the average American, so less than 7,500 miles per year. However, the exact number of miles may depend upon the state you live in or the insurance company you are working with.
To qualify for a low mileage car insurance policy, you will have to let your insurance provider know how many miles you drive per year. You may be required to report your odometer reading every six months to verify that you are actually driving as little as you say you are.
With a low mileage car insurance policy, you should see your premium drop to reflect the fact that you are not on the road as much as the average driver and thus shouldn't pose as much risk as to the average driver.
Type #2: Usage-Based Insurance
You may also want to consider usage-based insurance (UBI). With usage-based insurance, you are only charged for the insurance that you use, hence the name. UBI is also often referred to as telematics insurance because a telematics tracking device is installed on your vehicle to track your driving mileage and habits. Some insurance companies also call this pay-as-you-go insurance, and each major insurance company has its unique name for the driver tracking system used for UBI policies.
With this type of insurance, what you are charged is based on how many miles you drive and when you drive. For example, you will be charged less if you only drive on the weekends over the weekday, or if you drive outside of rush hour traffic time.
With this type of insurance, you have to be comfortable installing a driver tracking system in your vehicle or installing a mobile app that tracks your driving. Generally, your insurance provider will track your driving behavior for a set period of time, such as a couple of months, and then analyze that information to determine your rates.
If you don't drive very often, you may want to consider moving to a usage-based auto insurance policy or a low-mileage auto policy in order to reduce your insurance costs. For more information about customizing your car insurance, contact a local insurance agent.Share