Most of us don’t think much about car insurance. We eyeball the policy every year, fiddle around with a few changes to bring down the premium, and then forget about it until the bills come. And come they do — each exactly the same amount, no matter whether we’ve driven across the country or left the car in the garage.
Doesn’t sound right, does it? Mileage — like factors such as age and driving record — has long been correlated with accident risk. The more you drive, the higher the chance of a crash.
But unlike a driver’s age and record, how far you drive is not much of a factor in determining your premium. Some companies do offer low-mileage discounts, but these don’t come close to capturing the actual difference in accident risk between high- and low-mileage drivers. Todd Litman, director of the Victoria Transport Policy Institute in British Columbia, has done extensive research on the relationship between annual mileage and insurance claims. His studies suggest that if other risk factors — such as age of driver, time of day, and type of driving — are ... Read more