Not driving? Here are 6 reasons your insurance rates didn’t go down

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Susan Meyer

Senior Editorial Manager

  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

If you’ve been driving a lot less since the COVID-19 lockdowns began, you might be wondering, “Why isn’t my insurance cheaper?” After all, driving less means you’re less likely to get into an accident, file a claim, and cost your insurance company money.

The Zebra has released new research showing that even though Americans drove 14% fewer miles in 2020, they’d see at most 6.2% savings on their insurance policies on average. Here are six things you need to know:

  1. There are more people on the road than you might think. In April 2020, driving was down 70% from January 2020. By October, driving was down just 11%. As far as driving goes, things are getting back to normal.
  2. Clearer roads don’t mean safer roads. Even though roads have been clearer since the beginning of the pandemic, traffic deaths per mile driven increased 24.2% from January to October 2020. That means that you’re actually at more risk when you drive now than you were when roads were more congested.
  3. How much you save based on your mileage is affected by other rating factors. Rating factors are the characteristics on which your policy is priced, like age, gender, driving history and insurance history. So, for just one example, if your mileage has decreased but you’ve gotten tickets or had an accident in the last year, you’ll likely still see a rate increase.
  4. Many people underreport their mileage when they sign up for their policies, and insurance companies know it. Underreported mileage is technically fraud, and it costs insurance companies money. Usually, insurers look the other way (though they can reject a claim based on underreported mileage if they find out about it). But like many businesses, insurance companies are trying to find ways to save right now, and one of them is finding more accurate ways to measure mileage and charging more accurate prices.
  5. If you haven’t updated your insurance company on your decreased mileage, you should. If your mileage has dropped drastically in the last year and you haven’t reported it to your insurer, there’s no time like the present. You’ll probably save money, and if you don’t, it’s a good time to shop for a new insurance company.
  6. You might want to try usage-based insurance. Usage-based insurance policies are priced only on how and how much you drive. Because these policies don’t take as many rating factors into account, annual mileage can make more of a difference in a UBI policy than in a conventional policy. If you drive very seldomly, UBI might be a good option for you.

The good news about mileage and insurance is that even though the percentage you save for driving less is fairly low, it’s increasing over time. So the more you can stay home or opt for cycling and walking in the future, the more of a break you might get on your policy.

If you want to learn more about mileage and car insurance, read our full report.