The Role of Annual Mileage in Determining Auto Insurance Rates

Many factors influence your auto insurance premium, from your driving record to the make and model of your vehicle. Your annual mileage—the total distance you drive each year—can significantly affect your car insurance premium, depending on whether your insurer considers this information when determining rates. 

How Usage-based Auto Insurance Works

Usage-based auto insurance (UBI) offers a modern twist on traditional insurance models by basing premiums on actual driving behavior rather than static data.

UBI, also known as pay-as-you-drive or pay-how-you-drive insurance, uses telematics technology to monitor your driving habits. This technology typically involves a device installed in your vehicle or a mobile app that tracks various data points, including the following:

• Mileage refers to the total distance you drive.

• Driving behavior includes information on acceleration, braking and cornering.

• Time of day refers to when you’re driving, which can indicate risk levels.

Potential Benefits of Usage-based Auto Insurance

If you’re a low-mileage driver or someone who prioritizes safe driving, UBI could be a valuable tool for reducing your insurance costs. With UBI, your insurance rate is based on your actual driving patterns. If you drive less than average or demonstrate safe driving behaviors, you could qualify for lower premiums.

Many UBI programs offer discounts for good driving habits, encouraging you to drive more safely and responsibly. UBI can be more flexible in adapting to your changing driving patterns, offering a tailored approach that reflects your current driving behavior.

If you choose a UBI policy, you’ll need to install a telematics device in your car or download an app to start tracking your driving data.

How to Get UBI Coverage

Not all insurers offer UBI. Start by checking with your current insurance provider or exploring options from companies that specialize in usage-based insurance. The Rate Crushers team in Oakland, California, can help determine whether a UBI insurance program may be a good fit for your situation.

Contact Rate Crushers to learn how your annual mileage may impact your auto insurance rates. Our team can help you understand your car insurance options and compare personalized quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.