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Low Mileage Auto Insurance Policies

Low mileage auto insurance policies are not for everyone, but they are a great way to save money if you are a driver who doesn't do a lot of driving each year. They can help you control the cost of your auto insurance coverage. Low mileage policies are wonderful for those of us who usually just use our cars to go into town running errands or to visit friends and family nearby. If you do not put a lot of miles on your car, getting into a low miles policy can make a lot of sense. But these plans are not for everyone, and there are certainly drawbacks worth considering before you make the decision to enroll. Having a complete understanding of low mileage auto plans as well as a basis for seeing their possible drawbacks can give consumers a base of knowledge upon which to make the right choice about whether to opt for this type of car policy.

Low Miles Plans Save Money

Low mileage auto insurance plans save policy holders serious money on the cost of their premiums. The exact savings vary from situation to situation and from provider to provider, but suffice it to say that they are well worth investigating for anyone who consistently puts few miles on their vehicles each year. It makes sense that these plans are available from certain providers. After all, auto insurance premiums are based on risk. When an insurer takes on a driver, it is basically taking on the claim risk that particular driver represents, in exchange for the policy premium. This is the essential contractual relationship between a consumer and a provider in the world of car insurance. As customers we buy risk relief from providers.

Low miles plans save money on both sides of that contractual relationship, because they represent the insuring of a customer against a lower level of risk than an ordinary policy. A driver who puts 9,000 miles on her car every year is going to run into fewer risky driving scenarios than her neighbor battling rush hour traffic twice a day and logging 35,000 miles per year. Part of the computation of risk is simply based on how much the car being insured is on the road. If it is not being driven, it cannot be involved in an accident. And if it only ever gets driven in town at low speeds, the risk of a serious injury accident is much lower than it is for most drivers who go on the freeway every day.

Low miles policies are just a way some insurers have of trying to recruit these drivers who do not put many miles on their cars. They represent an offer to share some of the money saved by providers on these policies over the long haul. Any ideal contractual relationship ought to equally benefit both parties, and this principle is really no different in low mileage auto insurance plans.

Mileage Discounts Help Many Drivers

Mileage discounts help many drivers because they give them a way to claim savings for their low risk driving habits. It is only fair that a person who does not get behind the wheel very often should pay lower rates for insurance than they would if they logged a high number of miles in their insured vehicle. These plans are a great option for any driver who understands ahead of time that he or she will not be driving that much over the course of the year.

For example, a stay at home dad who only drives the kids to school and maybe goes to the store in his vehicle during the week should certainly look into getting this type of coverage for his car. Families with a stay at home parent often qualify for these policies, so they are an excellent option to look into for extra cost savings on your premium. Any couple can attest that every dollar you can save really helps when you are trying to deal with the financial cost of raising a family, especially doing it with only a single income.

Another group low mileage auto insurance policies are appealing to is the group of seniors who do not drive over a certain distance to begin with. As they get older, some seniors choose not to take their cars beyond a certain distance. Often this distance may get shorter as we get older. We may use our cars to visit local family and friends or to run errands, but we are less likely to make cross country trips in our cars than we were when we were younger. For this second group, low miles policies are a great option, because living on a reduced or fixed income makes money tight for almost all of us. It's great to have ways to save extra money and cut down on our monthly expenditures. Really, this kind of savings can help any one of us who happens to qualify for these low mileage policies. Having some extra cash to help us make ends meet never hurt anyone, that's for sure.

Limited Policies Not for Everyone

But these limited low mileage auto insurance policies are not for everyone. They are limited in the sense that they threaten voided coverage if the covered vehicle goes over the mileage threshold. For example, if your policy states that you can only drive 12,000 miles per year and you total your one year old truck with 16,000 miles on it, the insurer is very likely to decline payment on your collision insurance. On top of that your risk of cancellation is high, so you may be forced to find a new policy for any vehicles you own with a cancellation on your record.

Drivers who are clearly going to be under the maximum mileage threshold should have no qualms about signing on for coverage under a low miles policy. But for any of us who are on the precipice, who may or may not get in under that limit, the proposition in itself represents some risk. You do not want to jeopardize your policy just for the sake of saving a few dollars on your premium. These plans are generally not appropriate for any car slated to make a long cross country trip, for these trips alone can rack up several thousand miles in just a few weeks' time. The decision to go ahead and enroll in low mileage auto insurance policies should be made only in situations where you are confident in your eligibility, and not just in your desire to save money.

One variant of these policies is recreational vehicle plans. Drivers sometimes carry these on cars they cannot otherwise afford to insure. But if you get into an accident on your way to work and your mileage is shown to be beyond the limit, you will likely be looking for a new car without compensation for your old one, and a new insurer as well. Low mileage auto insurance policies are a wonderful option to save money on your policy if you are driver who puts relatively few miles on a car, but they should be purchased with caution.


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