Insurance discounts drying up

Returning home by car
ambrozinio / Shutterstock

With traffic way down during the pandemic, crashes and insurance claims have plummeted, too. A number of auto insurers have passed on their oversized profits to policyholders in the form of discounted premiums or refunds.

But as more people start commuting again, don’t expect those across-the-board benefits to automatically continue.

Any employees still working from home, clocking 30-second commutes on the heel-toe express rather than 30 minutes on the highway, will need to take action to keep getting reduced rates.

Savings could be a quick call away

Smiling handsome freelancer working remotely, talking on the phone.
Jelena Zelen / Shutterstock

Most insurance companies base their rates on an expected mileage of up to 12,000 miles per year, according to AutoInsurance.org. If you’re driving far less than that, there’s a good chance you’re overpaying for your insurance.

The site reports that drivers with long commutes end up paying about $7.09 more per month on average. Over a year, that adds up to about $85 — which may not seem like a lot of money, but it could become much more if invested wisely.

Of course, if you’ve really cut back on your miles, you could see even larger savings. Drivers clocking fewer than 7,500 miles a year could see savings of up to 20% on their premiums, says the personal finance site ValuePenguin.

That’s a lot of money you could save with just one phone call to your insurer.

How to save even if your commute isn’t changing

Smiling young woman holding paper bill, sitting in front of laptop.
fizkes / Shutterstock

Unfortunately, you’re not guaranteed to get a deep discount or any discount at all. Every insurer calculates their premiums in a different way, and some don’t put as much emphasis on the amount you drive every day.

If your insurer won’t budge, it could be time to shop around and see whether another provider is willing to reward you for low mileage.

In fact, even if you’re going to go back to the office five days a week, you may be able to use that strategy to find savings of nearly $100 a month.

Since premiums can vary so widely from company to company, the Insurance Information Institute recommends you compare at least three quotes before settling on an offer. It may sound like a lot of work, but you can handle the task in minutes using a quote comparison site.

That way, the next time you do have to waste an hour in traffic, at least you’ll know you’re not wasting your money.

About the Author

Sigrid Forberg

Sigrid Forberg

Staff Writer

Sigrid is a staff writer with MoneyWise. Before joining the team, she worked for a B2B publication in the hardware and home improvement industry and ran an internal employee magazine for the federal government. As a graduate of the Carleton University Journalism program, she takes pride in telling informative, engaging and compelling stories.

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