Working From Home: Lower Auto Insurance?

Working from home can have an impact on your car insurance rates. As you're spending less time on the road, you're considered to be at a lower risk of getting into an accident than other drivers. This means you may be able to get a better price through your insurer.

There are a few ways to go about this. Firstly, you can ask your insurer about potential discounts. Some companies offer usage-based insurance, where a tracking device is installed in your vehicle to monitor your driving habits and adjust your rate accordingly. You can also ask about pay-per-mile insurance, where you pay a fixed price per mile driven on top of a base rate.

Another option is to reduce your overall coverage. As a remote worker, you may not need the same level of coverage as someone who commutes to an office every day. You can also consider increasing your deductible, which is the amount you pay out of pocket before your insurance coverage kicks in. Just make sure you have enough savings to cover this in the event of an accident.

It's also worth shopping around and comparing quotes from different insurance providers to see if you can get a better deal.

Pay-per-mile insurance

Working from home means you're driving fewer miles each year, and you're less likely to get into an accident than other drivers. This means you may be eligible for a lower insurance rate. While many insurance companies don't offer specific discounts for those who work from home, there are still ways to save on auto insurance. One of these ways is through pay-per-mile insurance.

Here's how you can calculate your monthly insurance premium with a pay-per-mile insurance plan:

Monthly base rate + (Miles driven per month x pay-per-mile rate) = monthly premium

For example, let's say you have a monthly base rate of $40 and a per-mile rate of $0.07. Last month, you drove 330 miles. Your calculation would look like this:

$40 + (330 x 0.07) = $40 + $23.10 = $63.10

This means you would pay $63.10 for the driving you did last month.

It's important to note that pay-per-mile insurance is different from usage-based insurance programs, which track driving habits to give existing policyholders a discount or rebate. Usage-based insurance may involve installing a tracking device in your vehicle or using a smartphone app to monitor your driving habits and distance.

Usage-based insurance

Working from home can result in lower car insurance premiums. This is because remote workers tend to drive much less than those commuting to an office, making them eligible for usage-based auto insurance plans.

UBI programs generally measure speeding, acceleration, harsh braking, mileage, and the time of day you drive. The technology used to track your car's telematics data depends on your car insurance company. It could be through a system built into your car, a device plugged into your car's on-board diagnostics (OBD-II) port, a smartphone app, or a "tag" installed on your windshield or rear window that pairs with your smartphone via Bluetooth.

UBI programs can be mutually beneficial for both the driver and the insurer. The driver may earn a rate reduction, and the insurer can use the data to more appropriately price the policy. However, it is important to note that some insurance companies might raise your car insurance premiums if you don't score well during the review phase of a UBI program.

There are two basic types of usage-based programs:

• Driving-based: This type of program measures your driving habits, including how hard and how often you brake, how quickly you accelerate, and the time of day you drive.
• Mileage-based: Your insurer only measures how many miles you drive.

If you are a remote worker looking to save on car insurance, you can contact your insurance company and inquire about usage-based insurance programs or other discounts that may be available to you.

Discounts for bundling policies

Bundling insurance policies can be a great way to save money on your insurance premiums. Most large insurance companies offer discounts on your premiums when you buy multiple insurance policies from them. This is known as a multipolicy or multiline discount.

The savings when bundling homeowners and auto insurance are usually significant. For example, Wawanesa offers up to a 20% discount when you bundle home and auto policies. Progressive offers a similar discount for customers who bundle home, auto, motorcycle, and other types of insurance. American Family Insurance offers a discount of up to 23% for customers who bundle home and auto coverage.

In addition to the financial savings, bundling insurance policies can also provide other benefits. Having all your insurance policies in one place can make it easier to manage and access your policies. You only need to make payments to a single company, which can make it easier to keep track of payments and ask questions about your premium. It can also save you time, as you only need to contact a single representative to make changes to your policies or file claims.

When considering whether to bundle your insurance policies, it is important to shop around and compare quotes from different providers. The discounts offered for bundling can vary between companies, and not every type of insurance can be bundled with your auto insurance policy. For example, while some companies may offer a bundle discount for combining auto and life insurance, others may not. It is also important to ensure that the coverage provided by the bundled policies meets your needs.

Low-mileage discounts

Some insurance companies that offer low-mileage discounts include:

• USAA
• Safeco Insurance
• American Family Insurance
• Farm Bureau
• PEMCO
• GEICO
• Progressive
• Nationwide
• Liberty Mutual
• Allstate
• Erie Insurance
• Auto-Owners Insurance

It's important to note that eligibility requirements for low-mileage discounts may vary between insurance providers. Some companies may require proof of low mileage, such as submitting your mileage and a photo of your odometer, or providing service paperwork and a photo of your current odometer.

Additionally, low-mileage discounts may not be available in all states, so it's essential to check with your insurance provider to see if you qualify.

Increasing your deductible

However, it is important to note that if you need to file an insurance claim, you will pay more money out-of-pocket. Therefore, increasing your deductible is a good idea if you have the money to pay for small issues yourself without needing to file a claim. If you can afford to pay for damages, then you can take the savings your insurance company will give you.

When deciding whether to increase your deductible, you should consider your financial situation, your location, and the frequency of accidents you are involved in. If you have sufficient savings to pay a large sum, then a higher deductible may be a good idea. However, if you are in a location with a high volume of small accidents, or you are someone who gets into a lot of accidents, a lower deductible is probably a better option.

You should also consider the potential savings from increasing your deductible. For example, if you save $100 a year on your insurance costs by increasing your deductible, but then need to make a claim in the sixth year, you will only have saved $500, which is half of a $1,000 deductible. Therefore, it is important to weigh up the potential savings with the potential costs.

Overall, increasing your deductible can be a great way to save money on your auto insurance, but it is important to carefully consider your individual circumstances and financial situation before making a decision.

Frequently asked questions