Resource Center Next Research

Study: Annual mileage was down 14% in 2020 — but drivers only saved 6% on their car insurance

Even though COVID-19 kept U.S. drivers at home, they were unlikely to see significant savings.

Author profile picture
By Susan Meyer Info icon
Updated March 8, 2024
Author profile picture

Susan Meyer

Senior Editorial Manager

Credentials
  • 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…

View full profile Right arrow icon

On average, our customers save $480/year on car insurance. See how much you can save in minutes!

Location pin icon
No junk mail. No spam calls. Free quotes.

Introduction

As cities implemented lockdowns, employers moved to remote work and consumers opted for delivery services amidst the COVID-19 pandemic in 2020, drivers in the U.S. started using their cars less — a lot less. That raised the question: If people are driving less, shouldn’t they be saving money on their car insurance?

New research from The Zebra looked into how mileage affects car insurance and found that:

  • Most COVID-related insurance refund and rebate programs have already ended.
  • Even though Americans drove 14% less in 2020 than in 2019, drivers only saved up to 6.2% on their car insurance.
  • Other rating factors have always had a greater impact on car insurance rates and savings than annual mileage.
  • Usage-based insurance can save some drivers up to 9% — and more insurance companies are offering it.

Most COVID-related insurance refund and rebate programs have already ended

In April 2020, many insurance companies created refund and rebate programs for their customers. It was an acknowledgment that lockdowns and social distancing had decreased how much people in the U.S. were driving. To be precise, the Federal Highway Administration saw a 19.3% decrease in vehicle miles traveled between February and March 2020, and a further 27.2% decrease in vehicle miles traveled between March and April 2020.

Mileage FHWA graph

Source: Federal Highway Administration

Typically, consumers who took advantage of these rebate programs got 15-25% back on their policies. But the programs were meant to be temporary. Most carriers offered partial refunds only for a few months between March and June.

Critics like the Consumer Federation of America called for greater and longer-term savings, citing drastic drops — a 70% decrease — in vehicle miles traveled between January 2020 and April 2020. Lower mileage, they argued, meant lower exposure to risk, and should lead to greater savings for customers. It seemed like temporary 15-25% discounts were inadequate.

However, in the following months, drivers got back on the road. By November 2020, the most recent month for which the FHWA has mileage data, miles traveled were down just 13% from January 2020 compared to April’s 70%. Overall, mileage is down 14% from 2019 to 2020. 

Mileage fatalities graph

Source: National Safety Council

It also turned out that clearer roads aren’t necessarily safer roads. According to the National Safety Council, nine states had more fatal accidents in 2020 than in 2019 despite drivers travelling less. Across the United states, the rate of traffic fatalities per 100 million miles traveled increased from an average of 1.18 from January to October 2019 to an average of 1.46 for the same period in 2020 — a 24.2% increase. In other words, clearer roads in the COVID era increased drivers’ exposure to risk, likely because more drivers were speeding.

Even though mileage was down 14% in 2020 compared to 2019, drivers only saved up to 6.2% on their car insurance

Above and beyond rebate programs for lower mileage, car insurance companies already take annual mileage into account when they’re pricing insurance policies. In a typical year — not 2020, in other words — driving less would mean at least somewhat lower exposure to risks that lead to accidents and claims. 

However, it’s not a direct relationship. In 2020, if a driver cut their annual mileage from 15,000 to 7,500, they’d save an average of 6.2%, or $94 per year. While it may not seem like much, the good news is that savings for cutting mileage are increasing over time.

Mileage rate savings graph

Source: The Zebra

Savings also vary state-to-state. In California, where insurance companies can only rate policies based on insurance history, marital status, ZIP code and driving experience (including annual mileage), drivers saved 32% on their insurance for halving their mileage from 15,000 to 7,500. In North Carolina and Hawaii, that same drop in mileage makes no difference at all — drivers saved $0 on their insurance for it in 2020. Drivers in the majority of states see savings of 5% or less for major mileage drops.

State Rate for 0-7.5K annual miles Rate for 7.5-10K annual miles Rate for 10-15k annual miles Rate for 15K+ annual miles $ savings for halving mileage from 15K to 7.5K % savings for halving mileage from 15K to 7.5K
Alabama $1,248 $1,297 $1,320 $1,338 $90 7.2%
Alaska  $1,303 $1,397 $1,422 $1,438 $135 10.4%
Arizona $1,386 $1,416 $1,433 $1,446 $60 4.3%
Arkansas $1,678 $1,702 $1,702 $1,702 $24 1.4%
California $1,718 $1,822 $2,037 $2,267 $549 32%
Colorado $1,665 $1,698 $1,718 $1,735 $70 4.2%
Connecticut $1,504 $1,542 $1,542 $1,542 $38 2.5%
Delaware $1,568 $1,615 $1,622 $1,622 $54 3.4%
District of Columbia $1,361 $1,427 $1,442 $1,447 $86 6.3%
Florida $2,245 $2,324 $2,390 $2,455 $210 9.4%
Georgia $1,447 $1,539 $1,555 $1,564 $117 8.1%
Hawaii $1,080 $1,080 $1,080 $1,080 $0 0%
Idaho $1,240 $1,256 $1,256 $1,256 $16 1.3%
Illinois $1,269 $1,285 $1,292 $1,297 $28 2.2%
Indiana $1,158 $1,188 $1,193 $1,202 $44 3.8%
Iowa $1,135 $1,151 $1,156 $1,159 $24 2.1%
Kansas $1,517 $1,599 $1,601 $1,605 $88 5.8%
Kentucky $1,812 $1,849 $1,849 $1,865 $53 2.9%
Louisiana $2,256 $2,304 $2,328 $2,336 $80 3.5%
Maine $1,080 $1,100 $1,102 $1,104 $24 2.2%
Maryland $1,352 $1,436 $1,454 $1,474 $122 9%
Massachusetts $1,260 $1,303 $1,343 $1,359 $99 7.9%
Michigan $2,472 $2,535 $2,535 $2,535 $63 2.5%
Minnesota $1,376 $1,398 $1,401 $1,404 $28 2%
Mississippi $1,445 $1,501 $1,501 $1,501 $56 3.9%
Missouri $1,621 $1,687 $1,712 $1,728 $107 6.6%
Montana $1,494 $1,549 $1,549 $1,549 $55 3.7%
Nebraska $1,490 $1,521 $1,521 $1,521 $31 2.1%
Nevada $1,719 $1,744 $1,755 $1,755 $36 2.1%
New Hampshire $938 $961 $967 $971 $33 3.5%
New Jersey $1,461 $1,502 $1,507 $1,517 $56 3.8%
New Mexico $1,245 $1,274 $1,286 $1,292 $47 3.8%
New York $1,590 $1,693 $1,697 $1,706 $116 7.3%
North Carolina $1,011 $1,011 $1,011 $1,011 $0 0%
North Dakota $1,294 $1,322 $1,325 $1,328 $34 2.6%
Ohio $900 $926 $934 $937 $37 4.1%
Oklahoma $1,508 $1,546 $1,553 $1,555 $47 3.1%
Oregon $1,307 $1,332 $1,344 $1,349 $42 3.2%
Pennsylvania $1,274 $1,338 $1,338 $1,338 $64 5%
Rhode Island $1,822 $1,873 $1,873 $1,873 $51 2.8%
South Carolina $1,395 $1,466 $1,476 $1,484 $89 6.4%
South Dakota $1,418 $1,440 $1,444 $1,449 $31 2.2%
Tennessee $1,209 $1,258 $1,281 $1,288 $79 6.5%
Texas $1,438 $1,498 $1,522 $1,539 $101 7%
Utah $1,289 $1,313 $1,323 $1,337 $48 3.7%
Vermont $1,012 $1,056 $1,058 $1,060 $48 4.7%
Virginia $964 $1,026 $1,043 $1,051 $87 9%
Washington $1,181 $1,209 $1,215 $1,215 $34 2.9%
West Virginia $1,382 $1,429 $1,439 $1,442 $60 4.3%
Wisconsin $1,033 $1,080 $1,096 $1,120 $87 8.4%
Wyoming $1,381 $1,460 $1,462 $1,462 $81 5.9%

Other rating factors have always had a greater impact on car insurance rates

It’s possible that even though they were driving less in 2020, some insurance customers saw their rates increase. That’s because mileage is just one of many rating factors, or characteristics that go into calculating auto insurance rates. 

annual mileage.png

Car insurance prices are tailored to each driver, and any single rating factor could make a big difference in whether a driver’s rates go up or down depending on who they are, how they drive, and where they live. But on average, there are several factors and life events that have a greater impact on insurance rate savings than annual mileage:

Event $ savings % savings
Halving annual mileage from 15K to 7.5K $94 6.2%
Getting married $96 6.5%
Staying insured for six months without a lapse $100 6.5%
Bundling homeowners insurance and auto insurance $145 10%
Getting a texting-while-driving violation off of a driver's record $321 21.7%
Moving from Nebraska to Iowa $370 24.3%
Turning 19 $1,189 28%

Usage-based insurance can save some drivers up to 9% — and more insurance companies are offering it

Usage-based insurance, sometimes called “pay per mile” insurance, is an alternative form of car insurance that uses data from devices to monitor how and how much a customer drives. Because these policies don’t take into account non-driving factors like age, credit, gender and more, annual mileage can make more of a difference in a UBI policy than in a conventional policy.

Nationally, U.S. drivers typically save an average of just 3% when they opt for usage-based insurance over a conventional policy. How much a driver will save depends on their driving habits. And while ZIP codes aren’t used to price policies, state regulations make a difference in UBI prices. For example, drivers in Connecticut see 8.6% savings, while in California and Wyoming drivers see 0% savings. However, on average, usage-based insurance doesn’t increase insurance rates in any state.

State Rate without usage-based insurance Rate with usage-based insurance $ savings % savings
Alabama $1,297 $1,259 $38 2.9%
Alaska $1,397 $1,374 $23 1.6%
Arizona $1,416 $1,303 $113 7.9%
Arkansas $1,702 $1,651 $51 3%
California $1,822 $1,822 $0 0%
Colorado $1,698 $1,667 $31 1.8%
Connecticut $1,542 $1,410 $132 8.6%
Delaware $1,615 $1,486 $129 8%
District of Columbia $1,427 $1,409 $18 1.3%
Florida $2,324 $2,251 $73 3.1%
Georgia $1,539 $1,488 $51 3.3%
Hawaii $1,080 $1,055 $25 2.3%
Idaho $1,256 $1,242 $14 1.1%
Illinois $1,285 $1,222 $63 4.9%
Indiana $1,188 $1,131 $57 4.8%
Iowa $1,151 $1,110 $41 3.6%
Kansas $1,599 $1,559 $40 2.5%
Kentucky $1,849 $1,792 $57 3.1%
Louisiana $2,304 $2,191 $113 4.9%
Maine $1,100 $1,084 $16 1.5%
Maryland $1,436 $1,405 $31 2.1%
Massachusetts $1,303 $1,287 $16 1.2%
Michigan $2,535 $2,455 $80 3.1%
Minnesota $1,398 $1,373 $25 1.8%
Mississippi $1,501 $1,450 $51 3.4%
Missouri $1,687 $1,641 $46 2.7%
Montana $1,549 $1,508 $41 2.6%
Nebraska $1,521 $1,482 $39 2.6%
Nevada $1,744 $1,646 $98 5.6%
New Hampshire $961 $930 $31 3.2%
New Jersey $1,502 $1,446 $56 3.8%
New Mexico $1,274 $1,237 $37 2.9%
New York $1,693 $1,661 $32 1.9%
North Carolina $1,011 $987 $24 2.3%
North Dakota $1,322 $1,295 $27 2.1%
Ohio $926 $878 $48 5.2%
Oklahoma $1,546 $1,500 $46 3.0%
Oregon $1,332 $1,256 $76 5.7%
Pennsylvania $1,338 $1,274 $64 4.8%
Rhode Island $1,873 $1,735 $138 7.4%
South Carolina $1,466 $1,428 $38 2.6%
South Dakota $1,440 $1,385 $55 3.8%
Tennessee $1,258 $1,214 $44 3.5%
Texas $1,498 $1,446 $52 3.5%
Utah $1,313 $1,256 $57 4.4%
Vermont $1,056 $1,022 $34 3.3%
Virginia $1,026 $988 $38 3.7%
Washington $1,209 $1,204 $5 0.4%
West Virginia $1,429 $1,369 $60 4.2%
Wisconsin $1,080 $1,045 $35 3.2%
Wyoming $1,460 $1,460 $0 0%

More insurance companies than ever before are offering usage-based insurance. Carriers like it because it allows them to accurately track and analyze how their customers are driving and price policies accordingly. And according to the National Association of Insurance Commissioners, 40% of consumers have considered switching to usage-based policies.

Tips for drivers

As the U.S. continues to cope with COVID-19, it’s not clear when mileage will be back to the old normal. That being the case, there are a few tips drivers should keep in mind about their auto insurance:

  • Drivers shouldn’t cancel their car insurance. Lapses in coverage increase insurance rates in the long run. If they need to save money on their insurance, drivers can change their policy limits instead. 
  • Drivers might be able to temporarily suspend their coverage penalty-free. Some insurance companies allow drivers to suspend their insurance without a lapse in coverage if the customer isn’t driving at all, owns their car outright and has a private facility in which they can store their car. However, cars that have a coverage suspension won’t be covered for fire, damage, theft or any other non-driving incident.
  • Drivers should make sure their estimated annual mileage is accurate. For customers who aren’t using their cars much, this could mean savings. But it’s also important not to underreport mileage. It counts as fraud, and if a customer files a claim and the insurance company realizes they’ve been underestimating their mileage, the company can deny the claim.
  • Consider usage-based insurance. Even though the average savings are small, depending on their state, it could be larger than the savings they’re getting for adjusting their mileage on their conventional policy. Plus, drivers who drive less benefit more than the average driver from usage-based insurance.

Methodology

Between September and December 2020, The Zebra conducted a comprehensive auto insurance pricing analysis comprising data from insurance rating platforms and public rate filings. The Zebra examined more than 83 million rates to explore pricing trends across all United States ZIP codes and Washington, D.C.

Analysis used a consistent base profile for the insured driver: a 30-year-old single male driving a 2016 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision.