Does Your Commute Affect Your Annual Premium?

By Andrew Evans | | 12/07/2012

As the country continues to weather financial insecurity within the markets, consumers continue to seek out products, plans and services that offer additional value. For example, some mobile phone providers allow subscribers to avoid paying for minutes they didn't use within the billing cycle, either through pay-as-you-go plans or rollover minutes. It was only a matter of time before this logic would naturally spread into other areas of daily life.

Most of us pay our car insurance statements each year (or biannually), without thinking much about breakdown of the premium. How did the provider arrive at your specific premium? Do they even know how much (or how little) you even drive on a daily basis? After all, the less time you spend on the road each day, the smaller the probability that you will cause or incur vehicle damage. Of course, this is strictly anecdotal due to the varying types of "driving styles" and countless other variables. In the attempt to get a better perspective, commissioned a survey of insured drivers to determine how their rates were affected by the amount of time they spent on the road each day.

Respondents were categorized into four main groups: Those who drive less than five miles each day, those who drive 6 to 20 miles, those who drive 21 to 50 miles and finally those who drive 50 miles or more each day. We determined 48.6% of respondents drive a total of 6 to 20 miles each day and carry an average deductible of $474.38. Perhaps unsurprisingly, annual average premiums rise as the daily mile amount increases. Those who drive less than five miles a day pay an average annual premium of $768.96 compared to the $930.23 average spent by those who drive 50 or more miles each day. The 6 to 20 mile group pays an average of $843.96 each year for coverage.

When it comes to gender, our survey results suggest women have shorter daily commutes than male counterparts on average. Just over 37% of women drive 20 miles or less each day compared to 33.9% of male drivers. Conversely, 13% of women drive more than 20 miles each day compared to 15.7% of men. Male drivers that rack up 50 or more miles each day pay the highest premiums of any bracket with an average premium of $947.08. Female motorists in this category pay $909.04. Males that drive less than 5 miles each day pay the least for insurance with an average premium of $759.38. Surprisingly, female respondents reported paying almost $17 more in this category.

In conclusion, the survey results confirm the conventional wisdom that those who spend a significant amount of time on the road each day will likely pay more for insurance coverage. The question remains whether motorists with shorter commutes could benefit from switching to a different type of plan. Some industry analysts suggest those who drive less than 8,000 miles each year could save up to 30% on premiums by choosing a provider that offers "pay-as-you-drive" plans. Some companies will install a device in the policyholder's vehicle that tracks miles driven. recommends all motorists compare rates using a reputable service to determine if there are available savings, regardless of a daily average commute.

Browse Insurance
and Statistics in
[X] (click to close)