Low-Mileage Drivers Save Little On Car Insurance

When it comes to how much you pay for car insurance, being married and having good credit often matters more than how much or how well you drive, according to a new study.

The research, released this week by the Consumer Federation of America, found that major auto insurers provide little or no discounts to low-mileage drivers, even though they tend to have a lower accident risk.

The study looked at basic liability coverage at major insurers, including Farmers, Progressive, Geico, Bloomington-based State Farm and Northbrook-based Allstate. Drivers in 12 major U.S. cities were examined as part of the study, including Chicago, Atlanta, Baltimore, Cleveland, Houston, Minneapolis and Oklahoma City.

Erie-based Erie Insurance, the nation's 11th largest auto insurer, was not included in the study, but a spokeswoman said mileage is one of the factors that helps determine a premium.

The study found that on average, motorists save only $30 per year - or 1.6 percent of their insurance premiums, on average - for every 5,000 fewer miles driven each year.

The only exception was in California, where state law requires insurers to give a driver's annual mileage the second-most weight in determining premiums, according to the federation.

In California, motorists who drive 5,000 miles or less annually saved $81 a year on average, or 8.7 percent across the studied insurance providers.

At Farmers and Progressive, motorists outside of California received no discount at all for driving 2,500 miles or less annually. In fact, they paid the same rate whether they drove 2,500 miles annually or 22,500 annually. "You can drive 2,500 fewer miles per year and pay the same premium for your liability coverage," said Doug Heller, an insurance consultant at the federation.

When insurance companies diminish the impact of mileage in their pricing methods, lower-mileage drivers are punished by having to overpay for coverage, according to the study.

While Farmers and Progressive offered no discounts for low-mileage drivers, Allstate and State Farm offered modest discounts across all markets of 2.9 percent and 3.2 percent respectively. Geico, also included in the study, showed an average 1.3 percent annual reduction for low-mileage drivers in the cities studied, according to the federation.

Facts such as credit scores and having a blue-collar job don't send risk signals to insurers, Heller said.

But "people do get that how far you drive is a very fair (measure of risk)," according to Heller.

If you are a low-mileage driver, "It's always a good idea to shop around, because there's probably a better deal for you," he said.