Work From Home? 4 Tips to Reduce Auto Insurance Premiums

If you are working from home temporarily due to the COVID-19 pandemic or work from home all the time, then you may pay more for auto insurance than you have to. Since you do not commute to and from work every day, you likely drive fewer miles annually than the average driver or may have even stopped driving altogether.

Drivers who drive very little due to a lack of work commute have low-cost auto insurance options that are not available to other drivers. 

Read on to learn four tips for reducing auto insurance premiums when you work from home. 

1. Consider Pay-Per-Mile or Usage-Based Auto Insurance

There are two types of auto insurance policies available that were created for people who drive very little: pay-per-mile and usage-based policies. 

Pay-Per-Mile Insurance

Pay-per-mile auto insurance policies all vary slightly, but most begin with a low monthly policy base rate that increases by just a few extra cents per mile you drive your car each month. Your base rate is calculated using the traditional factors auto insurance companies take into account when calculating policy rates, such as your driving history and age. 

The company tracks how many miles you drive each month with a device that you plug into your vehicle's on-board diagnostic port (OBD II) or a smartphone app to determine your additional mileage fee. Alternatively, some pay-per-mile auto insurance companies require that you send them a photo of your odometer every month, 

Drivers who drive less than the average 12,000 to 14,000 miles per year could reduce their monthly auto insurance rates if they switched to pay-per-mile policies. 

Usage-Based Insurance

Usage-based auto insurance is similar to pay-per-mile insurance. However, when calculating your monthly insurance cost, providers of usage-based policies take into account not only the number of miles you drive but also your driving habits. Driving habits that can decrease your monthly rate include driving only during the day, but outside of rush-hour traffic hours; accelerating slowly; and avoiding hard braking. 

Usage-based insurance companies record your mileage and the details of how you drive with a device similar to those used by pay-per-mile insurance providers. 

This auto insurance plan type is a great option for low-mileage drivers that also always practice safe driving habits. 

2. Ask Your Insurance Company for a Low-Mileage Discount

Unfortunately, pay-per-mile insurance policies are not yet available in all 50 states. However, low-mileage discounts are. However, low-mileage discounts are. In fact, out of the 22 largest auto insurance companies in the United States, 18 now provide discounts of up to 30 percent off premium costs to low-mileage drivers.

Since the average American drives about 9,000 to 14,000 miles each year, these discounts are typically available to drivers who drive about 8,000 miles or less annually. 

Just like when obtaining pay-per-mile or usage-based auto insurance, you must typically track your miles driven with a special OBD III plug-in device or smartphone app to determine if you qualify for a low-mileage plan or discount.

However, many companies only require mileage tracking for several months before providing low-mileage discounts for the entire year. Others do not track mileage at all but instead require you to report your odometer reading only when making a claim to prove that you have been driving the number of miles you stated you drove when you obtained your discount. 

3. Inquire About a Work-From-Home Discount

Some auto insurance companies now also provide work-from-home discounts, although this discount type is not yet as widely available as the low-mileage discount.

To obtain a work-from-home discount, drivers typically do not have to use a device that tracks how many miles they drive each month. Instead, they simply report how many days they work from home and how many days they commute to a workplace to their auto insurance company. An insurance agent then determines the driver's discount eligibility based on their current work habits. 

4. Re-Tailor Your Policy to Your Current Needs

If you currently do not drive at all and have considered cancelling your auto insurance altogether due to a belief that you no longer need it or cannot afford it, then you may be surprised how much your insurance premium drops when you make just a few small changes to your policy.

You should always have auto insurance when you own a car in case you need to drive in an emergency situation; 49 states require that drivers have at least some auto insurance coverage, and they typically punish drivers who are caught behind the wheel with no coverage with stiff penalties. 

When you make the switch from a full-coverage policy to one that provides just liability insurance, your premium will likely drop greatly. Liability insurance only covers the cost of repairs to the vehicles of other drivers involved in accidents that you cause and the driver’s and passengers’ medical expenses. 

Add comprehensive coverage that can cost as little as an additional $100 each year to your policy if you would like your auto insurance company to help cover any damage inflicted to your vehicle while it is parked. 

If you now work from home due to the COVID-19 epidemic or have always worked from home, then use these four tips to help you save money on your auto insurance costs. Contact the insurance experts at L.A. Insurance for help obtaining the perfect auto insurance policy for your needs today.