If you have driven a lot less since COVID19 began, you might think, “Why is my insurance not cheap?” After all, driving less means you are less likely to have accidents, make claims, and spend money from insurance companies
Studies have shown that Americans drove 14 thousand miles in 2020, and showed that they saw up to a 6.2% savings for their insurance policy. Here are the six things you need to know:
- There are more people on the road than you think. In April 2020, driving was reduced by 70% compared to January 2020. In October, driving decreased by only 11%. When it comes to driving, things are returning to normal.
- Cleaner roads do not mean safer roads. Although roads have been smoother since the pandemic began, the number of traffic deaths per mile increased by 24.2% from January 2020 to October 2020. This means that driving today is riskier than it was when traffic was more condensed.
- The amount you save based on mileage is affected by other qualifying factors. The qualifying factors are characteristics of your policy price, such as age, gender, driving history, and insurance history. So, to give just one example, if your mileage has dropped, but you received a ticket or had an accident last year, you may still see a fare increase.
- Many people report fewer miles when they sign up for a policy, and insurance companies know this. Unreported miles are technically fraudulent and cost insurance companies money. Usually, insurance companies will take another approach (although if they find out, they can refuse a claim based on unreported mileage). But like many companies, insurance companies are now struggling to find ways to save money. One of them is to find more accurate ways to measure mileage and charge more accurate prices.
- If you haven’t updated your insurance company on your decreased mileage, you should. If your mileage dropped drastically last year and you haven’t reported it, there’s no time like right now! You can save money, and if you don’t, now is a great time to get a new insurance company.
- You might want to try usage-based insurance. The price of an insurance policy based on usage depends entirely on how and how much you drive. Since these policies do not consider so many other eligibility factors, compared with traditional policies, annual mileage has a greater impact on UBI policies. If you don’t drive often, UBI may be the right choice for you.
The good news about mileage and insurance is that even if the percentage you save by driving less is quite low, it will increase over time. So the longer you can stay home or choose to ride your bike and walk in the future, the more likely your rates won’t go up.