Mileage Discounts: Nymca Insurance Benefits

Low mileage car insurance is a discount offered by insurance companies to drivers who travel fewer miles than the average driver. The definition of a low-mileage driver varies across insurance providers, but it typically refers to those who drive under 7,500 to 10,000 miles per year. Some companies, like State Farm and Safeco, offer discounts to drivers who travel fewer than 7,500 miles annually, while others, like Auto-Owners Insurance, set the threshold at 10,000 miles. USAA, the insurance company with the lowest average annual rate for low-mileage car insurance, defines a low-mileage driver as someone who drives 6,000 miles or fewer per year.

Low-mileage insurance discounts

The definition of a low-mileage driver varies, but it generally refers to those who drive under a certain number of miles every year. The threshold for being considered a low-mileage driver is typically between 7,000 and 8,000 miles per year. However, some companies may consider you a low-mileage driver if you drive less than the national average of 12,000 to 13,500 miles per year.

There are a few different ways to take advantage of low-mileage insurance discounts. One way is to simply ask your insurance provider if they offer a low-mileage discount. Many companies, such as State Farm, Safeco, Geico, USAA, American Family Insurance, and Farm Bureau, offer discounts for drivers who travel less than 7,500 miles per year.

Another option is to consider pay-per-mile insurance policies, which base your rate directly on your mileage. These policies usually include a base rate plus a per-mile rate, and they often track your mileage using a plug-in device or mobile app. Some leading pay-per-mile insurance providers include Metromile, Allstate Milewise, and Nationwide SmartMiles.

Usage-based insurance programs are another way to save on low-mileage insurance. These programs track your driving behaviour, including mileage, through a telematics device or app. While they don't always offer a discount specifically for low mileage, people who drive less usually save more with these programs. Examples of usage-based insurance programs include Progressive Snapshot, Liberty Mutual RightTrack, and Nationwide SmartRide.

It's important to note that insurance rates are based on various factors, including location, age, driving record, credit history, and vehicle type. Additionally, low-mileage discounts and rates can vary by state and insurance company. Therefore, it's a good idea to shop around and compare quotes from different insurers to find the best low-mileage insurance option for your needs.

Pay-per-mile insurance

Some of the best pay-per-mile insurance companies are Allstate, Metromile, and Mile Auto, as they offer competitive rates and easy-to-use programs. Other major companies that offer pay-per-mile insurance include:

• State Farm
• Progressive
• Nationwide
• Liberty Mutual
• Geico
• Milewise
• Noblr
• SmartMiles

To determine if pay-per-mile insurance is worth it for your specific circumstances, you should compare quotes from several companies.

Usage-based insurance

UBI programs collect vehicle "telematics" data via cellular, GPS, or other technology. The technology used to track this data depends on the insurance company. For example, data can be collected through systems built into the car, such as BMW ConnectedDrive or OnStar, or through a smartphone app, such as Allstate Drivewise or Farmers Signal. Some companies also offer the driver a choice of data collection method.

UBI is ideal for students, retirees, stay-at-home parents, and drivers who don't commute by car. Drivers can usually save 10% to 15% annually with UBI, and the best discounts go to safe drivers who don't rack up a lot of mileage. However, it's important to note that some companies may raise insurance premiums if the driver doesn't score well. According to a TransUnion survey, car insurance rates decreased for only 48% of those enrolled in a telematics program and stayed the same for 30%.

There are two basic types of UBI programs: driving-based and mileage-based. Driving-based programs measure driving habits such as how hard and how often the driver brakes, how quickly they accelerate, and the time of day they drive. Mileage-based programs only measure how many miles the driver travels. Both programs rely on telematics to gather information about the driver's behaviour.

Some of the benefits of UBI include discounted premiums, safer driving, improved driving habits, and easier accident investigation. However, not all drivers will get cheaper rates, and aggressive acceleration or frequent hard braking may lead to higher policy costs.

Telematics insurance

• Number of miles driven
• Where the vehicle is driven
• How often there is rapid acceleration
• Number of times hard braking occurs
• If hard cornering takes place
• If an airbag is deployed

This data is typically captured by a mobile app or a small telematics device provided by your insurance company. If your insurer provides an auto-tracking device, you can plug it into your vehicle's onboard diagnostic port (OBD-II port), usually located under your dashboard. Vehicles produced after 1996 typically have this port. In some cases, telematics data can also be captured directly through your car manufacturer.

When you enrol in a telematics program, you agree to allow the car, device, or app to send information to your insurance company. This information is used to provide personalized driving feedback, safe-driving rewards, or potential cost savings on your car insurance policy for safe driving.

One of the key benefits of telematics insurance is that it can help low-mileage drivers save money on their car insurance. By opting into a pay-per-mile program, your insurer will track the miles you drive and charge you based on your usage. This means that you only pay for the miles you drive and can result in significant cost savings for those who drive less.

In addition to the potential cost savings, telematics insurance can also provide personalized driving feedback to help you become more aware of your driving habits and improve your driving skills.

While telematics insurance offers several benefits, there are also some potential disadvantages to consider. One concern is privacy, as some people may be uncomfortable with the idea of their vehicle's location and activity being tracked. Additionally, telematics programs can lead to increased rates for drivers who are considered "risky" or "bad drivers". It's important to note that the criteria for these labels may vary among insurance providers, and some programs may categorise drivers as bad drivers for behaviours such as abrupt stops or quick acceleration.

Overall, telematics insurance can be a great option for low-mileage drivers looking to save money on their car insurance. However, it's important to carefully review the terms and conditions of any telematics program before enrolling and be mindful of the potential disadvantages.

How to get low-mileage insurance

Low-mileage insurance is a great way to save money on your car insurance, especially if you don't drive too far or too often.

According to the US Federal Highway Administration, the average American drives around 13,500 miles per year, or about 37 miles per day. Many car insurance providers define "low-mileage drivers" as individuals who drive around 7,500 miles per year, or roughly 20-22 miles per day.

How to save on low-mileage insurance

There are three main ways to save on car insurance if you don't drive much: low-mileage discounts, pay-per-mile insurance, or usage-based insurance.

Low-mileage Discounts

Some car insurance providers offer reduced rates for those who drive fewer miles. Most companies offer this discount for people who drive less than 7,500-8,000 miles per year. Here are some providers that offer low-mileage discounts:

• USAA
• Safeco Insurance
• American Family Insurance
• Farm Bureau
• PEMCO
• State Farm
• Auto-Owners Insurance

Pay-per-mile Insurance

With pay-per-mile insurance, you pay as you go. Your monthly rate is determined by how often you use your car. You'll pay a base rate to keep your vehicle covered, and then a per-mile rate for each additional mile you drive. Pay-per-mile programs usually include a base rate and a per-mile rate each month, and track your mileage with a plug-in device or mobile app. Some leading pay-per-mile providers include:

• Metromile
• Allstate Milewise
• Nationwide SmartMiles

Usage-based Insurance

Usage-based insurance tracks your driving behaviour and mileage to determine your discount. While usage-based options aren't advertised as low-mileage programs, people who drive the least usually save the most. Some usage-based programs include:

• Esurance DriveSense
• Liberty Mutual RightTrack
• Nationwide SmartRide
• Progressive Snapshot
• State Farm Drive Safe & Save

Other ways to save on car insurance

There are also other ways to save on your car insurance, regardless of your mileage. Most insurance companies offer various discounts, such as good student discounts and safe driver discounts. You can also consider raising your auto insurance deductible if it's low, or shopping around for a new company with lower rates.

Frequently asked questions