Can I lower my car insurance rates if I start telecommuting?
UPDATED: Sep 22, 2015
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Asked September 22, 2015
If you are looking for ways to lower your car insurance premiums, telecommuting may be one way to achieve your goal. However, this will all depend on who your car insurance coverage is purchased through. Different companies use different methods to score your risk factor and determine your premiums. Here are a few ways that telecommuting can help you lower your insurance costs.
First of all, most insurance providers will ask you to fill out a driver questionnaire prior to giving you an insurance quote. One of the main questions on this survey is how much you will be driving the vehicles that you intend to insure. Some companies specifically ask about the amount of time you spend driving, or the number of miles you drive on average, but other providers will only ask you to classify the type of driving that you are doing (i.e. daily commuting, recreational, business). Telecommuting means that you will be using your vehicle less, and spending less time in the car will translate to insurance savings.
While most companies do offer some sort of low-mileage discount, they may set an unrealistically low threshold for what your mileage can be. For instance, the low mileage discount may only apply to those who drive less than 5-7,000 miles in a year. Even if you don't drive much, that can be a hard number to stay under. However, other companies offer a more flexible pay-as-you-go model, where you are only responsible for the miles that you are actually driving. For telecommuters this can be a huge advantage when they know they will be cutting miles out of their commute, but don't want to risk going over a set threshold.
Several insurance providers now give drivers the option to sign up for a mileage tracking program which allows them to send you a device to monitor your driving. In addition to keeping tally of the miles you are driving, some of these devices also score you based on driving habits such as your acceleration and braking, or what times of day you are driving, as these can influence the frequency of accidents you are involved in. These programs typically adjust your premium up and down at each renewal period as they continue to gather data about your driving.
The good news is that both of these options can save money for people who are able to telecommute. However, most low-mileage discounts are set at a 5% discount or less. Meanwhile the more advanced pay-per-mile options offer the chance for greater discounts from those companies.
Answered September 24, 2015 by indinoise