Why Does My Car Insurance Company Ask How Far I Travel to Work?

Long commutes mean greater risk.

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Insurance companies place policyholders in risk brackets to decide how much they should charge for insurance policies. For example, a car insurance company typically weighs a large number of factors -- including how far and often you commute to work -- to determine how much risk you pose.


During the application process, a car insurance company will ask how far and often you commute to work. The reason is that the more people drive, the more likely they are to be in a car accident. A long commute to work, therefore, makes insuring you a greater risk, and the company will set your rate higher to reflect that increased risk.


If you don't drive to work often, or if your commute is less than three miles, your insurance rate will be relatively low, because you spend less time on the road, according to the book "Personal Financial Planning," by Lawrence J. Gitman and colleagues. Your rate is likely to increase slightly if you commute more than three miles but less than 15 miles. Rates increase again if you travel more than 15 miles, according to the book.


The geographic area in which you live and commute also affects your insurance rate. For example, a high incidence of car accidents, auto thefts and insurance claims in a region might mean insurance companies will charge more for policyholders who live or work there. A heavily urbanized area, for instance, has many more drivers than a rural area, which means there is a higher risk of traffic accidents.


If you stop commuting, your insurance rates might drop as much as 10 to 40 percent, according to the book “Laid Off, Now What?!?” by Laura Dawn Lewis. The exact percentage decrease will depend on your insurance company, but generally, using your car for leisure purposes only can decrease your insurance rate.