Why does the mileage affect car insurance?

High mileage and insurance

Is it necessary to have an insurance?

Have you ever wondered if you truly need an insurance for your vehicle? The answer to this question will depend on your personal preferences and what you are willing to sacrifice for the desired outcome. Moreover, in some countries having at least minimal package of an insurance is a must.

Sometimes paying premium for the insurance of your vehicle pays off in the long run. Solely in US there are around 16,500 car accidents per day. This number indicates how likely you may be to become the victim of such misfortune. Similarly, it is usually quite problematic to determine whose fault was the accident. If the opposing side’s vehicle is insured, you may be at a disadvantage in such situation. Insurance companies are specializing on such cases and they know how to derive desired outcome for their clients.

Having an insurance may seem useless for some of you, but will certainly pay off in the long run. Especially if your annual mileage is higher than average, as it significantly rises the risk of being involved in a car accident.

Why do insurance companies care about mileage?

The mileage of the vehicle may not be an important factor in determining car’s condition, but it is frequently used by insurance companies for calculating annual payment for their services. How much you drive determines the probable risk of getting involved in a car accident. Consequently, annual mileage is frequently used for calculating how much you will have to pay to protect your car.

High-mileage and auto insurance

If you are one of those individuals who constantly drives long distances you may have to pay premium for the insurance of your vehicle. Insurance companies are driven by risks associated with your driving habits and annual high-mileage is used to determine the level of risk.

Do you belong to high-mileage drivers?

You may have asked yourself if you belong to this category of drivers. 12,000 miles (19,300 KM) is perceived to be the average mileage in most of the countries. Your country’s specific characteristics will determine these limits and it can vary significantly.

How much does insurance cost, depending on the mileage?

Those who drive from 12,000 miles up to 13,000 miles (21,000 KM) are usually charged around 500 $ (460 €). However, above that limit the price can go up by around 20 % (up to 600 $). This numbers will vary depending on the country and the insurance company that you use. Even the average mileage might be different because of country specific characteristics.

Don’t be discouraged if you have annual mileage above 15,000 miles (24,000 KM). Prices increase insignificantly if you drive above this limit. The difference can be around 2-3% for each extra thousand miles driven.

How much insurance coverage does my car need?

Insurance companies offer multiple packages that you can choose from. To determine which one is the most preferable for you, it is vital to consider approximate depreciated value of your vehicle. Usually the value of the car goes down by 20 % in the first year and by 10 % after each successive 4 years.

P.S Simply looking for the used cars on sale in the internet will give an idea of the price of your vehicle.

How to choose insurance company?

To make sure that your insurance company is willing to cover any damage that was determined by the agreement, you have to look for the reviews of the customers. Let’s face the truth, customers’ opinions are most reliable source to get an idea about the service provider that we would like to choose.

Similarly, to make sure you are not paying too much, it is always advisable to compare the prices of your favorite insurance companies for your desired package. Even though, in most cases the price is an important indicator of the quality, it can sometimes be an unnecessary extra expense.

How to be proactive and avoid paying premium for the insurance?

Most of the insurance companies will either ask to you or check the vehicle on their own to calculate your annual mileage. Depending on different rules, there can be plethora of sanctions that you may face in case of deceiving them about your car’s mileage.

However, you can always be proactive and take certain precautions:

Install Mileage stopper tool

There are many different options to stop the mileage. If you install one of these modules on your vehicle you can hinder your vehicle from counting unnecessary distance traveled. However, go for premium quality device to make sure all the other functions work smoothly. If you are one of those gearheads who is always willing to try new gadgets for his/her vehicle than you may consider installing Can Filter on your vehicle. Similarly, there are those who like testing their vehicle for the performance. This module can be used for such cases as well, as it is easy to install and can be turned on and off while in motion.

Take into consideration that using this device for other than testing and calibration purposes is forbidden by the law of many countries and you have to avoid it certainly.

Try to limit your daily travelled distance

Easier said than done! Especially if you drive on a daily basis for different purposes. However, if you are reading this article you may already know that mileage is taken into consideration for determining car’s depreciation. Hence, it is important to avoid unnecessary voyages that might decrease the value of your vehicle.

There are other determinant factors as well

Even though mileage is one of the most important factors, which most insurance companies take into consideration, there are other factors as well. If you take good care of your vehicle you may find an insurance company that considers overall condition of the car. You may drive a lot but it doesn’t mean that risk of being involved in an accident will be the same as for those who are more reckless drivers.

Best practices to insure a high-mileage vehicle

Find “pay as you go” insurance company

There are companies which charge you for distance that you cover during a month. Basically, they care about your present habits and not your past behavior. If you are able to lessen the monthly mileage of your vehicle, by all means do it.

Find an insurance company that considers the general condition of the car

As we have already mentioned some Insurance companies are more willing to consider overall state of your vehicle. Finding such company will allow to avoid paying premium solely based on mileage of your vehicle.

Takeaway

The mileage significantly affects how much you are charged for the insurance. Therefore, it is always advisable to be cautions of the distance travelled on a daily basis. There are many options that will allow you to deal with this seemingly harmless number if your car’s mileage is not displayed appropriately. One of the most useful tools is mileage stopper device that will allow to correct your odometer if you use your vehicle for testing purposes.

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