Auto Insurance: Excessive Miles And Your Policy Flagged

Excessive mileage on your car can have a significant impact on your auto insurance, and it's important to understand how this works to avoid unexpected costs or even having your policy invalidated. Auto insurance companies use annual mileage to calculate your insurance premium, with higher mileage typically resulting in higher insurance costs. This is because the more you drive, the greater the chance of an accident, and insurance companies consider you a higher risk. While the threshold for high mileage varies by company and state, driving over 15,000 miles per year is generally considered excessive. To avoid issues, it's essential to provide an accurate estimate of your annual mileage when taking out a policy and inform your insurer if your circumstances change.

How to calculate your annual mileage

The number of miles you drive in a year can impact your car insurance premium. Insurers use your annual mileage to assess how much you'll be driving and, therefore, how likely you are to get into an accident. The more miles you drive, the higher your premium is likely to be.

• Using your odometer: Note the number of miles on your odometer at the beginning of the week, and again at the end of the week. Multiply the difference by 52 to get a yearly total. You can also do this over a longer period, such as from the first day of January to the last day of June, and double the total.
• Using your MOT certificate: Your MOT certificate shows your total mileage over the last three years. By comparing the difference in total miles travelled each year, you can estimate your annual mileage.
• Using previous maintenance records: If you have records of your vehicle's mileage during an oil change, for example, you can compare that to your current odometer reading. For an oil change a year ago, subtract the old odometer reading from the current one. For six months ago, multiply the difference by two.
• Calculating your commute and weekend mileage: First, multiply your two-way commute to work by the number of days you commute in a week. Then, add your average weekend mileage. Multiply the total by 52 to get your yearly mileage.
• Using an annual mileage calculator: There are online tools that can help you calculate your annual mileage.

It's important to be as accurate as possible when calculating your annual mileage. Underestimating your mileage may invalidate your insurance, while overestimating it may result in you paying more for your policy.

What counts as high mileage?

The definition of high mileage depends on several factors, including the age of the car, the make and model, its history, and how it has been driven and maintained.

On average, cars get between 10,000 and 12,000 miles per year, so a car with an annual average lower than this can be considered as having good mileage.

However, a car with 100,000 miles on the clock is often considered a cut-off point for used cars, as vehicles often start requiring more expensive and frequent maintenance once they exceed this mileage. That said, modern advances in automotive technology mean that many cars produced in the 21st century will keep running long after the 100,000-mile mark. Some brands are known for making vehicles that regularly exceed 200,000 miles with only minimal maintenance. For example, a well-maintained car with 120,000 highway miles on the odometer might last longer than a similar car with fewer miles that was primarily driven in the city.

It's worth noting that the more miles you drive, the more likely you are to get into an accident, and the higher your insurance premium will be. Insurance companies consider drivers who log more miles to be higher-risk, so your rates will reflect this.

Ultimately, the definition of high mileage is subjective and depends on a variety of factors. However, as a general rule of thumb, if a car has over 100,000 miles on the odometer, it is considered high mileage.

How to save on car insurance

Excessive mileage can affect your car insurance rates. The more miles you drive, the higher your insurance premium will be, as you are considered a higher risk. This is because the more you drive, the more likely you are to be involved in an accident and make a claim.

• Shop around for insurance: Compare insurance costs and get quotes from different companies and types of insurance providers. Prices differ from company to company, so it's worth doing your research to find the best deal for your needs.
• Review your coverage: Understand the various coverages in your policy and assess whether you need them all. For example, if you have an old car that's been paid off, consider if you need collision coverage, and if the value of your car is worth more than what you're paying for that coverage.
• Look at your deductible: A deductible is the amount you pay before the insurance company pays a claim. Increasing your deductible can lower your insurance premium, but remember that you'll have to pay more out-of-pocket if you do have a claim.
• Take advantage of low-mileage discounts: If you drive less than the average number of miles per year, you may be eligible for a low-mileage discount. This is usually less than 12,000 miles per year, but it can vary by insurer.
• Bundle your insurance: Consider purchasing multiple types of insurance, such as homeowners and auto, from the same company. Many insurers offer discounts for this.
• Maintain a good credit history: Establishing a solid credit history can lead to lower insurance costs. Many insurers use credit information to price auto insurance policies, as research shows that people who manage their credit effectively tend to make fewer claims.
• Seek out other discounts: There are often other discounts available, such as for maintaining a good driving record, setting up automatic payments, signing up for a driving monitoring program, or being part of certain occupations or groups.
• Report any decrease in mileage: If you start driving less, for example, due to working from home, be sure to let your insurance company know. They may offer a pay-per-mile policy that could save you money.
• Compare insurance costs before buying a car: Insurance premiums are based in part on the car's price, repair costs, safety record, and likelihood of theft. Some insurers offer discounts for features that reduce the risk of theft or personal injury, or for cars with a good safety record.
• Increase your deductible: Opting for a higher deductible on your car insurance can significantly lower your premium costs. Just ensure you have enough money set aside to cover the higher deductible if you need to make a claim.
• Take a defensive driving course: Some insurance companies offer discounts to drivers who take a safe-driving course. These courses are often required to be retaken every few years to keep the discount active.
• Get an independent insurance agent: An independent agent represents multiple insurance companies and can help you compare coverage and premiums from several insurers more easily.
• Consider a dividend policy: Some insurers, such as Amica and NJM, offer dividend policies where policyholders own a stake in the company's investments and can receive dividend payments.
• Sign up for driver monitoring: Some companies offer discounts if you allow them to monitor your driving habits through a smartphone app or a device plugged into your car's diagnostic port.

Remember, it's important to review your insurance coverage regularly and shop around for the best rates to ensure you're getting the most suitable deal for your needs and budget.

How insurance companies check mileage

Insurance companies will typically ask for an estimated annual mileage when you buy a policy to get an idea of how much you'll be driving. This is because the more you drive, the more likely you are to get into an accident and make a claim. Therefore, drivers with a lower annual mileage generally get cheaper car insurance.

There are several ways insurance companies can check your mileage:

• Self-reporting: A driver may get a call from their insurer asking for a current odometer reading. However, the insurer may have no way to verify the accuracy of this self-reported data.
• Technology: Some insurers require drivers to put a tracking device in their car that automatically records mileage data and transmits it to an insurance app installed on the driver's smartphone. Alternatively, a device plugged into a port in the car can automatically record data, including mileage.
• Databases: Some insurers tap into state or national databases to confirm vehicle mileage. This could include data from state inspection providers, maintenance, repair shops, and car dealers. For example, insurance companies can check your MOT history, which includes your total mileage from the last three years.

It is important to provide an accurate estimate of your annual mileage. Going over your annual mileage could invalidate your policy, meaning your insurer won't pay out if you need to make a claim. Additionally, under-reporting your mileage may be considered a form of fraud.

How to get low-mileage insurance discounts

Excessive mileage can lead to higher insurance costs or even an invalidated policy. However, low mileage can result in significant discounts. Here are some tips on how to get low-mileage insurance discounts:

Calculate your average mileage

Use your odometer to calculate your current average mileage. Set the odometer to zero and record the number of miles travelled over a week. Multiply this number by 52 to get your annual average mileage.

Contact your insurer

Once you have calculated your average mileage, contact your insurance provider and ask for quotes based on your low mileage. You may be eligible for a "pay per mile" insurance plan if you drive less than 26 miles per week.

Shop around

If you are a low-mileage driver, it is worth shopping around for the best insurance rates and discounts. Some companies, such as Travelers and Geico, offer more affordable rates for low-mileage drivers. USAA also offers excellent rates, but their coverage is only available to military members and their families.

Be accurate when estimating annual mileage

When buying a policy, insurers will ask for an estimated annual mileage. It is important to be as accurate as possible since going over this estimate could invalidate your insurance.

Update your insurer if your mileage changes

If your annual mileage significantly decreases, be sure to inform your insurance company. For example, if you start working from home or retire, your mileage will likely reduce, and your insurance company may lower your premiums.

Consider usage-based insurance programs

Many insurance companies offer usage-based insurance (UBI) programs that monitor your driving behaviour and mileage to determine discounts. These programs typically involve installing a tracking device or using a mobile app to record your driving data.

Track your mileage accurately

To ensure you provide accurate mileage estimates, consider using a pen and paper to record your mileage at the beginning and end of each trip. Alternatively, there are now phone apps available, such as Zoho Expense, Shoeboxed, and Everlance, that can make tracking your mileage easier.

By following these steps, you can take advantage of low-mileage insurance discounts and ensure you are paying a fair price for your car insurance.

Frequently asked questions