Why does my car insurance company ask how far I travel to work?

There are many factors that come into play when computing car insurance rates. One of those factors is actually the average number of miles your drive each year.

This factor though not the biggest factor when it comes to determine your car insurance rates definitely plays a part with the relationship between the number of miles and car insurance rates being directly proportional.

Part of the reason that “miles traveled to work” is used to compute your insurance rate is that the longer you are on the road each day, the more chance there is of you getting in an accident. Every minute you are driving is an opportunity for an accidnet.

The estimated number of miles you drive each year is determined by your driving pattern which includes your “pleasure” miles as well as your work distance. The pleasure distance simply means the average miles you put into your car from using it to go to anywhere that does not include work. This means the distance you travel going to and from the grocery store, the mall, the park, to a restaurant, to pick up the kids, to go on your yearly vacation, and more. Your work distance is much easier to gauge than the pleasure miles since the distance to your work place is fixed, unless you are field worker that goes from location to location.

As mentioned earlier the relationship between the total number of miles and car insurance rates are directly proportional. This means that if you normally use your car for a total of 9,000 miles a year then you can be pretty sure you’re your insurance rates will be lower than if you normally use your car for a total of 15,000 miles per year. It does not necessarily mean though that if you have fewer miles per year than a friend then you’ll automatically have lower car insurance rates. Remember that the rates depend on a number of factors and the other factors just might outweigh the fact that your miles are significantly less than that of your friend’s.

Since pleasure miles are harder to compute for each year the total number of miles each year depends largely on the number of miles you take going to and from work. Hence people who have to take a short commute to work automatically have an advantage as compared to those whose work place is quite a distance off. So aside from the obvious advantages of working in a place near your home, which are shorter travel time and cheaper gas allowance, there’s an additional advantage that most people don’t realize – a lower car insurance rate.

Can I Cancel My Car Insurance When Going Out of Country?

While you can cancel car insurance at any time, doing so should only be done under rare circumstances, such as no longer having a car. In an instance where you are leaving the country, it may not be the best decision to outright cancel your car insurance. If you are leaving the country temporarily, say for a year or a few months, do not cancel your car insurance.

Never allow yourself to have a gap in your insurance period. So if you are leaving the United States, you must decide whether to keep your insurance active on the car at home or purchase insurance on a new car in the foreign country before canceling your insurance at home. This ensures there is no gap between insurance coverage, an important consideration for insurance when determining your rates. Furthermore, if you are leaving temporarily and leave you car behind, you should keep insurance on the vehicle because if it involved in an accident -- say someone hits it while it is parked -- your insurance company will handle the situation instead of you.

Contact your insurance company to discuss your situation. If you are temporarily leaving the country, explain this to your insurance company and ask for the lowest amount of insurance possible because no one will be driving the car. Each state has different levels of minimum coverage. For example, you may be only able to get fire and theft coverage for your vehicle in one state while another may include vandalism and accident coverage. Either way, you will be paying a lot less than normal. And when you return, you can reactivate your old coverage on the vehicle.

Keeping your insurance uninterrupted is a preference for insurance companies, which means you may receive benefits or discounts for having uninterrupted auto insurance. Insurance companies may question why you didn’t have auto insurance for a six-month or one-year period. They may label you as a high-risk driver and charge you higher premiums even though you didn’t make any claims. Furthermore, if you are leasing your vehicle, you may be required to have insurance on it at all times. If it is canceled, the lease company may be able to take the car back.

Consider these rules even when you are going to a different state. Even though you are still in the United States, car insurance laws differ from state to state. It would still be unwise to cancel your insurance – even for a short period – while moving or temporarily relocating to a different state.