If you are a short distance driver, then there is every possibility that you can get much lower rates on your car insurance. What’s more, there are some insurance companies that offer pay-as-you-go type insurance that can reduce your rates even further.

You see, the less you drive, the less risk there is of you having a car accident. Because your risk is reduced, your insurance company is more inclined to offer you lower rates based on that reduced risk!

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Most insurance companies have some sort of discount for when you drive less than a certain number of miles. The miles for this discount and how much the discount actually is depend on the insurance company. Keep reading to learn more about getting lower car insurance rates.

Exactly how much can I drive and still get a discounted rate?

As mentioned above, the exact amount you can drive will vary from insurance company to insurance company. Some have a maximum of 12 miles a day in order to qualify, while others allow as much as 40 miles a day.

In some cases, the allotted miles you can drive is displayed on the discount page on the insurance company’s website. However, it is more common to have to ask about the terms for this discount. Some companies don’t even list it as a discount option at all, which is why it is important to ask up front what discount options are available with the company you choose.

What is pay-as-you-go insurance?

Pay-as-you-go insurance, which is sometimes called pay-as-you-drive insurance, is a fairly new concept among car insurance carriers and many don’t offer this type of program at all. Allstate and State Farm are both companies that have pay-as-you-go programs in some states with the idea of making these programs available in every state. There are also some smaller, less well-known companies that are offering pay-as-you-go programs.

The premise of this type of program is that you are charged a base fee for your insurance, for example, $120 a year, and then you are charged a fee for each mile that you drive. The programs are rather sophisticated and there are different fee rates for driving at different times of the day as risk increases or decreases, such as at rush hour.

In order to track your driving, the insurance company has to install a device into your vehicle that tracks your movements. In some cases, the device may only track the time of day and the miles that you drive. However, there are some devices that track your position, your driving habits, the speed limits in your area, and more. It is important that you are fully aware of everything the company is tracking and ensure you are comfortable with it.

Who would benefit from pay-as-you-go insurance?

As you may have guessed, pay-as-you-go insurance isn’t right for everyone. If you drive hundreds of miles a day or even in a week, this program could end up costing you far more than buying a standard policy.

The people best suited for this type of insurance are people who work from home, work close to home, or don’t travel a lot. You should travel less than 12 miles a day to get the most benefit from pay-as-you-go insurance, although some plans are still affordable at around 30 miles a day.

Some insurance companies recommend this type of insurance for students because it can help keep their insurance costs down compared to standard insurance. In addition, parents can keep track of their children’s driving habits with these types of programs as well.

What are other ways that I can get lower car insurance rates?

There are several ways to ensure that you get lower rates, for example, by being a safe driver. In addition, you should consider keeping any teen drivers out of the driver’s seat on your car, maintaining good credit, driving a safe car, and so on.

You should also ask your insurance carrier about any discounts that they may offer. Just because it isn’t listed on their website doesn’t mean that they don’t offer great discounts. Speaking up and asking an agent can end up saving you lots of money.

Always ensure that you don’t buy more insurance than you need. You can visit sites like the National Association of Insurance Commissioner’s or the Insurance Information Institute to see a list of different options recommended for drivers in your state.

Lastly, you should always compare rates between multiple companies. There is no way you can be sure that you are getting the lowest rates until you do.

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