Is it a bad idea to set your auto insurance miles too low?

If you want cheaper auto insurance rates, is it bad if you set your auto insurance miles too low? You should never lie to your insurance company, but the higher your annual mileage, the higher your rates will be since you pose a higher risk to insure. Is it bad if you set your auto insurance miles too low? If you drive very little, you can save money by switching to pay-per-mile insurance or by applying a low mileage discount to your current policy.

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Aug 26, 2021

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Can't-Miss Facts

  • Insurance companies view drivers with high annual mileage as an increased risk to insure
  • If you drive less than the national average, you could get a low mileage discount
  • Pay-per-mile insurance is a great choice for drivers who don’t frequently hit the road

If you want cheaper auto insurance rates, is it bad if you set your auto insurance miles too low? While there are many factors that insurance companies use to calculate your rates, your annual mileage certainly plays an important role in these calculations.

Not every driver will fall into the same set of auto insurance mileage brackets because some people must travel a long distance for work, others work from home, and some city dwellers, even if they have a car, still primarily use public transit.

Your rates are affected by the number of miles you put on your vehicle, but if you’re caught lying about mileage, auto insurance companies will not take to that too kindly.

If you don’t drive very much during the year, you may want to look into pay-per-mile insurance and other discounts to see how much you can save.

Is it bad if you set your auto insurance miles too low? It certainly is if you want accurate insurance quotes. Enter your ZIP code today to receive free quotes from insurance companies in your city.

How does commuting for work affect a driver’s insurance rates?

There’s really a very basic reason why auto insurance companies are interested in how much you drive every year. Simply put, the more often you’re out on the road, the higher your chances of getting into an accident.

Not only does driving more put you at risk of encountering reckless drivers, but your vehicle will suffer more wear and tear too.

Insurance companies are also very aware that nearly half of all auto accidents happen just five miles from home, as reported by the National Highway Traffic Safety Administration (NHTSA).

This may be shocking, but it seems that once drivers arrive in a familiar location, they lower their guard. Accidents cost insurance companies money so if giving you cheaper rates on your insurance will incentivize you to drive less, they’ll do it.

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What do insurance companies charge if drivers are often on the road?

If you want affordable auto insurance, is it bad if you set your auto insurance miles too low? In general, the fewer miles you put on your vehicle the better.

Below, you can take a look at the difference in rates offered by major insurance companies to drivers who drive below the average annual mileage:

Average Auto Insurance Rates by Mileage
CompaniesAverage Annual Rates with a
10 Mile Commute
6,000 Annual Mileage
Average Annual Rates with a
25 Mile Commute
12,000 Annual Mileage
Allstate$4,841.71$4,934.20
American Family$3,401.30$3,484.88
Farmers$4,179.32$4,209.22
GEICO$3,162.64$3,267.37
Liberty Mutual$5,995.27$6,151.63
Nationwide$3,437.33$3,462.67
Progressive$4,030.02$4,041.01
State Farm$3,175.98$3,344.01
Travelers$4,399.85$4,469.96
USAA$2,482.69$2,591.91
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As you can see, limiting your driving can prove to lessen the strain on your budget, but of course, if you need to drive for work, it can’t be helped.

This doesn’t mean that you can’t save money, though. Look into the discounts that your insurance company offers and make sure that each one you qualify for is applied to your policy.

Why do longer commutes cost more to insure?

If you were to ask an auto insurance company, “Is it bad if you set your auto insurance miles too low?” That insurance company would most likely say, “Yes.”

That’s because auto insurance companies determine risk, and if you drive frequently throughout the year, you are more likely to be involved in an accident.

Your mileage isn’t the only factor that determines that. Your ZIP code is also an indicator of risk; insurance companies will see the traffic patterns of your area as well as how many accidents happen locally.

Your location, especially if it is a highly trafficked area, and the amount of time you spend on the road can help an insurance company how much of a risk you are to insure.

Do auto insurance companies check mileage for their clients?

Insurance companies have a few ways to check their clients’ annual mileage. California actually has a regulation in place that requires your odometer to be read so all parties know that the right amount of insurance is being charged for the correct mileage.

Many states also require annual inspections; your vehicle’s odometer reading is entered into a database during such an inspection, and insurance companies can access that information. This allows them to work out the average miles that you drive.

If you’re shopping for auto insurance quotes, is it bad if you set your auto insurance miles too low? Even if your state doesn’t require annual inspections, you should always be honest when filling out quote information.

Lying about your insurance carries some severe consequences. For example, if you were caught falsifying your annual mileage, your auto insurance company could see that as a very valid reason to cancel your policy.

Also, if you were to be in an accident and needed to file a claim, your vehicle’s odometer reading would be recorded. If you had been dishonest about your annual mileage, your insurance company would be able to use this information to prove that.

How can drivers find out what their annual mileage is?

If you want to buy auto insurance, is it bad if you set your auto insurance miles too low? Providing inaccurate information when shopping for insurance can negatively affect you in the long run, so you should learn how to accurately ascertain your annual mileage.

You can do so first by resetting your vehicle’s odometer to zero and using an online route planner to determine the miles you drive on a weekly basis.

You can also refer to your vehicle’s service history. By comparing the service date with the recorded mileage you can determine your average annual mileage and avoid any discrepancies on your insurance policy.

If you see that you don’t drive very often, you could be eligible for low mileage auto insurance discounts.

How can low mileage help drivers?

Some of the top usage-based insurance programs can help you save money on your rates if you have low annual mileage. Not only that, but such programs can even save you money if you have driving habits, too.

In order to qualify for low mileage driver discounts, you must drive less than 5,000 miles per year. Whenever you fill out quotes when shopping for car insurance online be sure to make note of your low annual mileage.

If you drive very little but are still unhappy with your rates, you may want to look into pay-per-mile insurance.

What is pay-per-mile insurance?

Although pay-per-mile insurance is not as abundant in the insurance marketplace as other types of policies, it is becoming more and more popular. Pay-per-mile insurance is great for drivers who are not often on the road.

Drivers typically must pay a base rate every month and then only pay for the miles that they drive. People who work from home or who often use public transit could greatly benefit from this type of insurance and it can be purchased at Allstate or Metromile.

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Setting Low Mileage on Your Auto Insurance: What You Need to Know

In short, the higher your annual mileage, the higher your rates will be since you pose a higher risk to insure. If you drive very little, you can save money by switching to pay-per-mile insurance or by applying a low mileage discount to your current policy.

Of course, if you drive a lot, inquire about what types of discounts you can add to your policy so you can reduce your rates. If you discover that you are still paying too much for your auto insurance, try shopping online for better rates.

If you’re still asking, “Is it bad if you set your auto insurance miles too low?”, enter your ZIP code today to receive free insurance quotes.

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