How Car Sharing Services Affect Car Insurance Rates

Insurance carriers have measures in place that take into account the driving habits of the individuals they insure. Car sharing services affect car insurance rates in multiple ways. When a person drives less, the individual has the opportunity to realize savings on his or her premium.

When insurance carriers screen applicants, they inquire about a person’s driving habits. An insurance carrier evaluates the driver’s annual mileage estimate. They will calculate the mileage to a person’s place of employment based off of the work schedule information they are provided with by the driver. If an individual participates in a carpool or vanpool program, the individual can realize potential savings on car insurance rates. An individual who has recently been laid off, or offered a telecommuting alternative will also be able to save on a car insurance premium. The individual driving less will have a lower annual mileage estimate. A lower annual mileage estimate can be beneficial to a person that is interested in saving on car insurance.

There are a select group of carriers that offer savings of up to 50 percent for drivers that spend less time on the road. This is why many people have become participants in car sharing services like carpools. The Consumer Federation of America reports that Americans save an average of 10 to 15 percent on car insurance rates, when they drive less. Insurance companies view drivers with lower annual mileage rates as less of a risk to insure. The insurance carrier looks at the driver with the shorter commute as less of a risk than an individual that drives long distances on a regular basis. Insurance companies view the policies they provide to customers as an investment, they want to minimize risks.

There are multiple scenarios by which a person could reduce the costs of insurance premiums. The more popular options are mass transit and car sharing. The easiest adjustments to make toward reducing one’s mileage on a vehicle translate into savings on car insurance rates. An individual that works in a popular business area further away from the residence should explore the opportunity of car sharing. Most people work further away from their residence than they’d like to and most work during peak business hours. A driver can definitely benefit from joining a vanpool or carpool. Car sharing services usually require an individual to commute within a 15 mile radius of the home. Multiple drivers rotate the driving responsibilities and commute together with a third-party van. The costs of commuting are shared through monthly membership fees. Car sharing services are a popular option for individuals that want to save on car insurance rates.

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