Why Driving Fewer Miles May Not Lead to Lower Auto Premiums<br />“By using a variety of rating factors, insurers are able to develop a more complete picture of<br />a driver’s potential for filing a claim and in this way more accurately price the policy.”<br />As the report itself says, insurers do consider mileage driven as a factor, the association said,<br />but “as one would expect in a competitive market, it is done so differently among insurers.”<br />Some insurers, the report noted, have said they don’t emphasize mileage in setting rates because customers often wrongly estimate how much they drive.<br />The Property Casualty Insurers Association said in a statement<br />that the federation’s latest report was “flawed” and showed a “fundamental misunderstanding of auto insurance underwriting and rating.”<br />Insurers use multiple factors that have proved to be effective in predicting<br />the likelihood of someone filing an insurance claim, the association said.<br />(The cities tested were Atlanta; Baltimore; Boston; Charlotte, N. C.; Chicago; Cleveland;<br />Houston; Los Angeles; Minneapolis; Oklahoma City; Rochester; and Tampa, Fla.)<br />The report found that outside California, given drivers with similar characteristics, Progressive<br />and Farmers usually quote the same rates to someone who drives just 2,500 miles a year that they do someone who drives 22,500 a year.
