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Annual Mileage Estimate Can Lower Car Insurance Premiums

This post has been Consumeristed!

There are many financial issues to consider after you’ve been laid off. Filing for unemployment benefits. Signing up for COBRA or researching health insurance options. Rolling over your 401k. Reviewing the household budget.

I didn’t realize, at the time, that reviewing your auto insurance policy is also a great idea. I’ve been paying around $75 a month for coverage. When renewal time came, I called my insurance carrier to see if there’s any way I can get my premiums lowered without a decrease in coverage levels. Because of my layoff, I did not have daily commute. Even with treks to interviews and job fairs, my new mileage estimate is still far lower than my original figure.

With lower mileage estimates, I decreased my premiums to ~$60 a month and I will be getting a $135 “overpayment” refund from my carrier. I’m only sorry I didn’t do this sooner!

So, the lesson is this: if anything changes in your life that would affect your annual mileage estimate, tell your insurance agent! Some of these changes might be (of course, these changes might also increase your mileage):

  • Change in job situation (ex: layoff, new job at a closer location)
  • Change in relationship (ex: if you are in a long-distance relationship but you have now moved in with each other)
  • Change in living location (ex: you used to live in a rural area but have moved in a city where more nearby amenities)

A reduced annual mileage estimate can very well lower car insurance premiums.

  • Katie - Mr. is about to make the switch over to working from home full time and as soon as he does, we'll be on the phone with our insurance agent. ReplyCancel

    • WellHeeled - Wonderful. I'm sure you'll see a big decrease in your premiums, all other things equal. ReplyCancel

  • Don@Moneyreasons - Good move (I'll have to check that out myself).

    I hope the job search is going well!

    I was hoping the job market would improve by now… :( ReplyCancel

    • WellHeeled - I have 2 interviews lined up, so that's good! I think the market is better than last year in the sense that I'm getting more traction (more jobs to apply for, more interviews, etc.), but it's still extremely difficult to get the offer. ReplyCancel

  • Guest - I had done that and the interesting thing is that I neglected to update the insurance company (Farmer's) that my annual mileage had increased after getting a new job. I noticed that my premium had increased somewhat and when I called to inquire, they said that the increased premiums were based on the odometer readings recorded at my oil changes, which suggested that my annual mileage was greater than what I was being charged for. !!! It felt quite Big-Brotherish. ReplyCancel

  • Tell Car Insurance Company You’re Driving Less, Save On Premiums | Real-Time Finance - […] finance blogger Well-Heeled says she found a silver lining in suffering a layoff — the lack of a need to commute reduced her […]ReplyCancel

  • Kim - Who is your auto insurance provider? I am currently on my parents' plan with Mercury, and just got an estimate from AAA today (and have done other estimates with Geico, Progressive, etc.) and can never get lower than ~$130/month! Is it because of geographic location or something? ReplyCancel

  • Little House - Great idea. I need to look into this. I'm currently paying about $92 a month, but I don't really drive that much. ReplyCancel

  • Bryan_Tucker - I was paying for my car insurance through my nose some time back. On a friend’s suggestion I shopped around for lower rates on the net and shifted to Hartford auto insurance, saving almost $450! And all this time I was under the impression that for the same coverage, the rates are similar everyplace. Can’t believe I never thought of checking around to compare earlier. ReplyCancel

  • Car Coach - I've been working from home for several years, and in addition to the reduction in miles driven, when you convert the categorization of your car from "business use" to "personal use" you should also notice a drop in your premiums. Just beware you may actual have to prove your reduction in mileage in order to keep the rates low. ReplyCancel

  • Mr. Brian - I was working and commuting to school, has my policy set at over 20,000 annually. Got laid off but still go to school, annual mileage down to 9000. That saved me $40 on my policy. $56/month down to $44/month for state required coverage.ReplyCancel

  • Melinda - i know i’m a little off topic, but i just wanted to say i love the layout of your blog. i’m new to the blogegine platform, so any suggestions on getting my blog looking better would be appreciated.

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