Taking the Bus? Get a Car Insurance Discount

This post comes from Des Toups at partner site CarInsurance.com.

Last year Americans used public transportation in the greatest numbers in nearly six decades, an advocacy group says.

Riders took 10.7 billion trips on buses, subways, commuter rail, light rail and trolleys, the most since 1956, according to numbers released by the American Public Transportation Association.

Public transit ridership is up 37.2 percent since 1995, APTA says, outpacing population growth, which is up 20.3 percent, and vehicle miles traveled, up 22.7 percent.

“There is a fundamental shift going on in the way we move about our communities,” says APTA president and CEO Michael Melaniphy.

If you’ve recently begun riding public transit for your commute to work, there are three ways you might find substantial savings on your car insurance as well.

Low-mileage discounts

Because every mile you don’t drive is less risk for an insurance company, drivers who rack up few miles get a big break.

At 7,000 miles a year or less, the average low-mileage discount is about 2 percent, according to data gathered for CarInsurance.com by Quadrant Information Services. In some states the discount can be much higher: Wisconsin drivers typically see 4 percent, and Massachusetts more than 5 percent.

But the champion for low-mileage car insurance discounts is California, where state law forces insurers to consider mileage above other factors. Average discount in the Golden State: 22 percent.

If you’re driving very little and have a stellar driving record, you could even consider pay-as-you-drive insurance plans, which monitor your moves behind the wheel but always consider low mileage above all. Saving can reach 30, even 40 percent.

The pleasure-use discount

Insurance companies usually ask drivers about how they intend to use their insured vehicles. For most drivers, a commute to work or school is the typical use, and standard passenger car rates apply.

Someone who uses a vehicle in business can expect to pay more. Someone who uses the vehicle for farm work would usually pay less.

And someone who used to commute but now drives the insured car only occasionally might qualify for a pleasure-use designation. On average, the reduction in rates for pleasure use is about 2.5 percent. In Hawaii, where low-mileage discounts are hard to come by, the change to pleasure use can cut rates by nearly 10 percent.

The non-owners policy

If you’ve gotten rid of your commuting appliance altogether, congratulations: You’ve just greatly simplified your financial life. Even if your car just sat, it was costing you depreciation and insurance and maybe even a monthly payment.

But as you simplify, keep an eye on the future. If you have no other vehicles at your home, you’re likely to need one occasionally for the odd trip to Costco or a vacation. Eventually, you may decide to buy another car.

In those cases, it’s a great idea to keep what’s known as non-owners car insurance, which is effectively liability coverage that follows the driver from car to car. It’s cheap, assuming you have a clean record, and it will allow you to turn down added liability coverage on rentals.

It will also make insuring your next car much, much cheaper. Insurers value continuous coverage highly.

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