You may know you have to tell your insurer how many miles you plan to drive, and that it affects how much you pay for your car insurance – but how exactly, and why? We ask our experts, Robert Lee – Underwriting Manager – and Martin Smith – Motor Technical Claims Manager, and give you some tips on how to get the most mileage for your money.
By Remy Maisel
When you get a quote for car insurance, you’ll be asked how many miles you’re going to drive, for example, if you’ll drive up to 4,000 or 20,000 miles a year, and everything in between and beyond.
What you tell your insurer will impact how much you pay for your insurance. However, it’s not as simple as driving less means paying less.
You’ll need to get a good idea of how much driving you’ll be doing. But that might not be so easy to do if you’re a first-time driver, or if you’re thinking this is the year you’ll finally drive the Scottish coastal route.
Calculate your annual mileage for car insurance
You might have a good idea of your average yearly mileage. But if you don’t, there are a few things you can do to find out, according to Martin Smith. “Looking back at service records or MOTs can help,” he says.
Your ‘vehicle use’ will also affect your annual mileage – for example, if you have business use, then your mileage is likely to be higher than someone who has commuting cover (or just social, domestic, and pleasure use).
“Mileage bands may start from 4,000 miles annually and go up in increments of 1,000 or 2,000. Once you get up to 20,000 miles per year, the incremental bandings become wider,” says Robert Lee, “as typically, if you drive more, you’ll pay more. The more time you spend driving the risk of you being involved in an accident goes up and the more risk you are for your insurer.”
Of course, if your circumstances change, your mileage may change, too. “For example, if you used to work from home and only used your car at weekends to see friends, check out a heritage site or go to the beach but now have a job with a 50-mile-a-day commute, you’ll need to factor that in – and make sure you tell your insurer about the change of use,” says Martin.
This is also the time to consider if you might go on a road trip or three.
What if I’m a new driver?
“The majority of first-time drivers are likely to be younger drivers so telematics policies could be a good product to consider,” says Robert. Telematics insurance is a type of insurance that sometimes needs a recording device to be installed in your car. It measures things like how fast and how safely you drive – it can also measure how much you drive and adjusts premiums accordingly. Some products use apps that can be downloaded on a customer’s mobile phone to connect and record driving habits.
“For those that don’t take the telematics option the easiest way to determine annual mileage is working out a single week’s mileage and then convert that to an annual figure. It could be worth considering adding some additional contingency mileage as well for things like annual holidays or emergency/unexpected trips.”
How does my mileage impact my car insurance premium?
Mileage is just one of many rating factors that insurers use to calculate how much you’ll be quoted for car insurance, or premium. “Requesting a lower mileage may mean a slightly different rating factor is applied, but other rating factors may mean the price is more expensive than a different risk with a higher annual mileage,” says Robert. In other words, lower mileage may not necessarily mean lower car insurance.
“Customers should be as accurate as they possibly can when estimating annual mileage,” says Robert. “If it’s under-estimated then it could have consequences at claims stage, if it’s over-estimated then the annual premium would reflect the mileage chosen.”
What happens if I go over mileage on car insurance?
The worst-case scenario is a claim might be refused and/or your insurance might be cancelled. The best case scenario is that your insurer could charge you more for the extra mileage covered.
“As with any matters relating to insurance purchases, it’s important that consumers try to answer questions honestly and give as accurate information as they can,” reminds Martin.
That said, you may do your best to estimate your mileage and still get it wrong. “Each individual will have different ‘unexpected’ trips,” says Robert. “Personally, as I have a young family, I’ve added extra mileage to my policy to cover driving them to clubs, friends’ houses, parties, and the like.”
“If you’ve underestimated your mileage, most insurers will allow you to increase it,” explains Robert. But if you significantly underestimate it, or deliberately misrepresent it when you take out the policy, you could potentially invalidate your insurance or have your claim denied. Overestimating mileage is rare though because most people change this when they renew.
So, now you know why you’re asked for your mileage when getting car insurance quotes and why the mileage could impact how much you’re quoted.