Why Driving Fewer Miles May Not Lead to Lower Auto Premiums

Minh Uong/The New York Times

70 NEWS JAPAN - People who don’t drive much are generally at lower risk for traffic accidents, but they may not always get big discounts from auto insurers, according to a new analysis. In many markets, drivers may not be offered significant reductions in their auto premiums, even if they cut down on mileage, the report from the Consumer Federation of America found.

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The federation, which has long been critical of auto insurers’ rate-setting criteria, tested premiums in 12 cities by obtaining 275 quotes from the websites of five large insurance companies. The biggest insurers typically offered “little or no” premium reduction to low-mileage drivers compared with high-mileage drivers, the research found — even though the distance driven annually is an important factor in predicting accidents.

“You can’t crash when you’re not driving,” J. Robert Hunter, the federation’s director of insurance, said in a call with reporters.

Yet some companies ignore drivers’ actual mileage driven, he said, or give a “pittance” as a discount that has little impact on premiums. Insurance companies often emphasize a driver’s personal characteristics, such as marital status and credit score, rather than other risk indicators, like the annual mileage driven, said Mr. Hunter, a former state insurance regulator. “How well you drive and how much you drive” should be the main factors considered in setting premiums, he said.

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In most areas, he said, drivers pay the same premium whether they drive 90 miles round-trip to work each day, or if they take public transit and drive their car only on the weekends.