Guide to car insurance for low mileage drivers

Key takeaways

• If you drive significantly fewer miles than the national average, you may qualify for low-mileage discounts or usage-based insurance.
• Insurers typically verify low mileage drivers by way of odometer readings, maintenance records, or telematics apps that track driving habits.
• The number of miles that qualifies someone as a low-mileage driver can vary between insurers, so it pays to shop around and ask about specific mileage thresholds.

If you drive less than the average motorist, you might be overpaying for auto insurance. Too many low-mileage drivers (remote workers, retirees, and those who rely on public transit) continue to pay premiums that don't reflect their limited time on the road.

The good news? By understanding what qualifies as low mileage and how it affects your insurance rates, you can take advantage of your infrequent driving habits and potentially lower your costs.

Who is considered a low mileage driver?

A low mileage driver is someone who drives significantly fewer miles than the average motorist over the course of a year.

For example, let's say that Sarah drives to work every day, runs errands, and takes as many road trips as she can fit into her busy life. All this extra driving adds up to about 13,000 miles a year. James, on the other hand, works from home and only drives on weekends, totaling around 4,000 miles annually. While Sarah's mileage is typical, James driving habits would put him in the low-mileage driver category—a difference that could mean big savings on his car insurance.

What is considered “low mileage” for car insurance?

In the U.S., the average driver logs about 13,596 miles per year, but that figure can vary depending on a person's age, where they live, and their lifestyle. If you're driving significantly less than 13,596 miles a year, you may qualify as a low-mileage driver and could be eligible for certain auto insurance discounts.

While the exact threshold for low mileage driver will vary by insurance provider, insurance companies typically define low mileage as someone who drives fewer than 7,500 to 12,000 miles per year.

Insurance companies typically use several different methods to verify whether a driver qualifies as low mileage. This may include:

• Odometer readings. Many insurers will ask for a photo of your car's odometer or require you to report the mileage prior to your policy renewal date.
• Periodic vehicle inspections. Some insurers may ask for service records that include mileage.
• Telematics or usage-based programs. Because these programs track your mileage and monitor driving behavior in exchange for personalized discounts on your auto insurance, they may be used to verify just how much you drive your car.
• Self-reported mileage estimates. When you apply for auto insurance, you'll be asked to estimate your yearly mileage. Insurers may request that you verify the miles you drive before every renewal.

Why does annual mileage affect your auto insurance policy?

The more you drive each year, the more chances there are of something to go wrong, such as getting into an accident. Insurance companies look at your annual mileage to figure out just how risky it is to insure you.

If you drive a lot, you're on the road more, and your risk is higher which in turn can mean higher insurance costs. On the other hand, if you drive less, you're less likely to have an accident, so you may be eligible for a discount.

What is the best car insurance for low-mileage drivers?

If you're a low-mileage driver, the best type of auto insurance is one that rewards you for driving less. Here are the top insurance options for low mileage drivers to consider:

• Pay-per-mile auto insurance is a type of coverage where your premium is based on how much you drive. Instead of paying a flat rate like traditional insurance, you pay a small base fee each month plus a few cents for every mile you drive. Simply put, you only pay for what you use.
• Usage-based insurance (UBI) tracks your driving through an app or device. Drivers who maintain safe habits and log fewer miles may qualify for discounts. Check out Liberty Mutual's RightTrack program if this sounds like the right fit for you.
• Traditional auto insurance with low-mileage discounts work by having you report your annual mileage. Many insurers offer low-mileage or occasional use discounts for drivers who work from home or are retired.

What happens if I exceed the mileage allowance?

Insurers set auto insurance rates based on how much you say you'll drive. If you go over that limit, they may see you as a higher risk. Depending on your policy, this could result in higher auto insurance rates upon renewal, loss of your low mileage discount, or additional charges (especially with pay-per-mile plans).