Short Answer: If you have a mileage-based discount on your auto insurance policy and exceed its mileage limit, you will lose your discount, but you will generally not pay any other fees or penalties. If you have a pay-per-mile policy, there is no limit on the number of miles you can drive, but you will pay a higher premium when you drive more miles. For more information about mileage limits for auto insurance policies and discounts, see below.
What Happens If You Go Over the Mileage Limit on Your Auto Insurance?
Several auto insurance companies, such as State Farm, Allstate, Nationwide, Progressive, and Liberty Mutual, offer mileage-based or low-mileage discounts for drivers who do not drive very much. The exact mileage limits and discount amounts vary depending on the availability of the policy by state, so you can check with your local auto insurance agent to find out about your specific policy’s limits.
For these types of policies, the mileage limits apply only to the discount you can receive, not your eligibility for the policy. If you exceed the low-mileage limits, you will lose the discount on your auto insurance premium — but your insurer will not drop you from your policy. We contacted each of the insurance companies mentioned above and were told that none of them apply additional fees or penalties for exceeding low-mileage discounts.
When Are Discounts Calculated?
Low-mileage discount programs often track your mileage (with an in-car device, a mobile app, etc.) and calculate your premium each month. Therefore, if you exceed your mileage one month and lose your discount, you can reinstate it the next month by staying under the limit.
Some companies renew discounts after a longer period; for example, State Farm adjusts discounts every six months. If you are no longer eligible for the low-mileage discount, the change will appear on your account as soon as the discount renews. You can contact your local agent to see if you can reinstate the discount during the next cycle.
Some auto insurers, such as Allstate and Nationwide, offer insurance policies where you pay per mile driven. With a pay-per-mile plan, your premium will be higher the more miles you drive. For these policies, there is no specific discount applied, customer service representatives said. Pay-per-mile plans do not generally impose limits on mileage, so you will not be removed from the policy for driving more. Also, you will not pay additional fees or penalties (above the maximum premium) if you drive more, customer service representatives told us.
For more about buying car insurance, check out our research on where to buy auto insurance online with a checking account and auto insurance companies that don’t check credit.