Are There Work From Home Discounts for Auto Insurance?

Last Updated on August 31, 2020

More people are working from home than ever before. Working from home means you avoid a commute. But does working from home mean cheaper car insurance premiums?

Some insurance companies offer work from home discounts on auto insurance, while other companies do not.

Accident and claim rates are down during the COVID-19 pandemic. That’s why some insurers have refunded premiums to customers. Some insurers are offering 10 to 20% discounts on insurance premiums, for example, to reflect the lower risk. Other insurers aren’t offering work from home discounts.

Today, we’re explaining how work from home discounts work for car insurance, including how much money you can save by working from home.

Many Insurers Offer Low Mileage Discounts

work from home auto insurance discountsA few decades ago, it was common for insurers to ask about your commute when calculating insurance premiums. Insurers would analyze your commute distance and time, then use this information to calculate premiums.

Today, it’s less common for insurers to consider commutes when calculating premiums.

Instead, most insurers consider annual mileage. The average American drives approximately 9,000 to 14,000 miles per year, depending on your state. If you drive significantly fewer miles than that number, then you could qualify for cheaper insurance premiums.

How Working from Home Impacts Risk

Working from home can change you from an average driver into a low mileage driver. With your normal commute, you may have driven an average of 14,000 miles per year. Now that you’re working from home, your average annual mileage may have dropped significantly.

Let’s say your old commute was 20 miles each way or 40 miles per day. If you worked 20 days a month, then you’re driving 800 miles per month exclusively with your commute, giving you an average annual mileage of 9600 miles per year. If you spend a few hundred extra miles per month driving for other purposes – like road trips and groceries – then you’re within the average range.

However, if you suddenly started to work from home, then your average annual mileage has dropped significantly. Now, you’re no longer spending 800 miles per month on a commute. Instead, you’re spending 0 miles on that commute.

Yes, you’re still driving on road trips or to get groceries, but a significant chunk of your driving has disappeared.

It’s not just about mileage: working from home means driving outside of rush hours. You might drive to the grocery store in the middle of the day when there are few cars on the road, for example. That means less chance of an accident and a lower risk of making a claim.

For all of these reasons, working from home can significantly change your risk. Instead of driving 12,000 miles per year and qualifying as an average driver, for example, you might drive just 5,000 miles per year, which means you qualify for low mileage status.

How Low Mileage Car Insurance Works

Some car insurance companies reward drivers who have low mileage. If you drive significantly fewer than, say, 8,000 miles per year, then you could qualify for a low mileage car insurance discount.

To qualify for a discount, some insurers ask you to install an app or driver tracking system. The insurer monitors your driving habits for a 30 to 90 day period, then analyzes this data and calculates fair premiums.

If the data shows you only drive around 500 miles per month, for example, then the insurer may reduce your premiums. You qualify for a low mileage discount because you’re only driving 6,000 miles per year, on average.

Some companies use a mobile app to track driving behavior. You install a mobile app, and the company tracks your driving habits. The app activates automatically whenever it notices you driving.

Other companies use some other type of driver tracking system. You might insert a small electronic gadget into your vehicle to transmit odometer information, for example.

Some insurers don’t require any tracking system whatsoever. Instead, some insurers require you to visit a licensed mechanic every 6 to 12 months, for example, to verify your odometer.

Other insurers trust you to be honest: they ask you to self-report your mileage. The insurer may never actually check your mileage until you need to make a claim. If the insurance company discovers you’ve been driving 15,000 miles per year when you’ve been claiming a 5,000 mile per year low mileage discount, then the insurer could deny your claim.

Do All Insurance Companies Offer Low Mileage Discounts?

Most insurance companies offer low mileage discounts. In fact, some states require insurance companies to consider mileage in their pricing. California legislation, for example, requires car insurance companies to consider mileage when assigning quotes.

Talk to your insurance company to determine any available low mileage discounts.

Or, compare quotes from other insurance companies. Some insurance companies specifically cater to those who work from home or have low annual mileage.

Best Insurance Companies for Working from Home

Some insurance companies cater specifically to drivers who work from home. As a growing part of the workforce continues to work from home, insurers are rising to address that demand.

Companies like MetroMile have emerged, for example, for drivers with low mileage. With MetroMile and similar companies (like Root and Noblr), you pay for insurance by the mile. Instead, of paying a flat monthly premium regardless of mileage, you pay based on how much you drive.

Other companies specialize in low mileage car insurance or insuring drivers who work from home.

To find a low mileage car insurance company in your area, compare quotes online today. Look for insurers that ask about annual mileage in their online application.

Do I Qualify for Low Mileage Car Insurance While Working from Home?

So you work from home. You no longer commute to work. Do you qualify for low mileage car insurance?

It depends. As more people work from home than ever, some companies have implemented stricter requirements for low mileage car insurance.

Some companies now require you to drive fewer than 5,000 miles per year to qualify for low mileage discounts or work from home discounts.

Consider your average weekly or monthly mileage. Check your odometer today, make a note, and check it 30 days from now. Multiply the difference by 12. If you drive fewer than 8,000 miles per year, on average, while working from home, then you should qualify for a low mileage or work from home discount.

Final Word on Car Insurance and Working from Home

Contact your car insurance company to ask about work from home discounts on car insurance. A growing number of insurance companies now offer discounts to those who work from home.

Some insurers refer to these discounts as low mileage discounts. Others refer to them as work from home discounts. Whatever you call the discounts, people who work from home can save a significant amount on car insurance simply by contacting their insurer or comparing quotes online today.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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