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How Does Annual Mileage Affect My Auto Insurance Rate?

3 minute read

To set your auto insurance rate, insurance providers look at multiple factors. Some common examples include your age, driving history, and location. However, your vehicle’s annual mileage can also affect the cost of your auto insurance rate. Why? Because insurers can use such information to determine your likelihood of filing a claim. 

Whether you’re a frequent highway cruiser or seldomly drive, understanding your annual mileage and how it affects your premium will help you better manage your coverage rate.

Annual Mileage Overview

Using the latest data from the United States Department of Transportation Federal Highway Administration, we can calculate that the average person drives around 12,724 miles per year. This translates to roughly 1,060 miles per month, or about 34 miles a day.

How Does Annual Mileage Affect My Auto Insurance Rate?  

The number of miles you drive per year can influence your auto insurance rate. Insurance providers will typically ask you to provide a yearly mileage estimate whenever you apply for new coverage. Generally, the less you drive, the less you’ll pay for car insurance.

As you spend more time on the road, your chance of being in an accident increases. By knowing your mileage—alongside additional factors—insurers can determine your insurance risk then set your premium accordingly. For example, a driver with low annual mileage is less likely to experience a traffic collision than a driver who commutes 50 miles daily. As a result, the low mileage driver will likely have a lower premium than the driver with a long commute.

Most providers rely on the honor system to obtain your annual mileage, although some do have telematic programs that can track such data in real-time. Examples include Mercury’s RealDrive program (only available in California) and Progressive’s Snapshot program. These programs use your driving habits to determine your rate, which may help you save. However, it’s important to remember that by registering with these programs, you allow providers to adjust your mileage when it comes time to renew. Program availability may vary depending on where you live.

Suppose you’re driving habits change drastically throughout the year. In that case, you have a chance to update your annual estimated mileage whenever your policy is up for renewal. Contact your insurance specialist to learn whether you qualify for a reduced rate if you find you’re driving less.

What are Commuting Miles?

When shopping for auto coverage, applications will ask whether you use your vehicle for pleasure, business, or commuting.

“Commuting miles” is the term used for the number of miles an individual drives to and from work. Insurance providers may ask for this information if you mainly use your vehicle for your commute. They can then determine if your annual mileage estimation is realistic with this data.

What is Considered Low Mileage?

Infrequent drivers may be eligible for auto insurance discounts if they drive less than the average driver. But what do insurance providers consider low mileage? Most companies tend to group policyholders into three mileage classifications: low, average, and high.

Though the figures can vary, insurers typically classify low mileage drivers as those who drive less than 7,500-10,000 miles a year. Drivers who fall near the national average are considered average mileage drivers. Most companies consider a yearly mileage over 15,000 miles to be high.

How to Reduce Your Annual Mileage

Although other insurance factors such as age and zip code data are out of your control, there are ways to reduce your annual mileage even with a daily commute.

Ideally, you should be living as close to your job or school as possible to limit your daily driving. But with home prices skyrocketing, moving may be easier said than done. To reduce your annual mileage, consider the following:

  • Set up a carpool system with your coworkers and classmates. This will also help your group save on gas if you live nearby each other.
  • If your commute is short enough, consider purchasing a bike and biking to work or school.
  • Use public transportation whenever possible.
  • Take advantage of park-and-ride services.

Incorporating just one of these alternatives once a week can make a notable difference in your annual mileage.

Find the Coverage That’s Right for You

Understanding the amount you drive per year can help you save when it comes time to purchase auto coverage. Using your mileage, you can compare rates from different insurance providers to find the best deal. At AIS, we work with a network of insurance partners to find the best coverage for you. To speak with an insurance specialist, call us at (888) 772-4247 or get a free online quote today.


The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.