Does working from home reduce car insurance?

If you’re no longer commuting every day, you’ve probably noticed a pleasant side effect: your gas tank lasts longer, and your car gets fewer miles. But what about your insurance premium? With remote and hybrid work becoming the new normal, many drivers wonder if their car insurance should change too. The answer is yes, but it’s not automatic. Let’s walk through how working from home affects car insurance, your coverage, premiums and savings potential.

How working from home affects car insurance rates and coverage

Your commute isn’t just a time commitment. It's a big part of how insurance companies assess your risk. The more time you spend on the road, the more likely you are to be in an accident. So, when you cut your commute, your risk profile shifts too.

Why fewer miles usually mean lower premiums

Car insurance is all about risk, and mileage plays a major role. Less driving means fewer chances to get into a crash, which translates into lower exposure for your insurance company. This is why companies take mileage so seriously when determining what you pay.

Before diving into savings options, it helps to understand the key pricing methods carriers use and what each means for your rate:

• Risk-based pricing – Insurance premiums are built on the likelihood of claims. If you drive less, you’re statistically less likely to file.
• Usage-based programs – Some insurance companies track your actual driving with telematics (a small device or app) and adjust rates based on your mileage and habits.
• Pay-per-mile insurance programs – These programs charge a base fee plus a per-mile rate. For people who rarely drive, the savings can add up fast.

If your new routine means fewer miles overall, it might be time to explore these flexible pricing options.

What is low-mileage insurance?

Carriers define low mileage differently, but many set the threshold around 5,000 miles per year. State matters significantly though because 5,000 miles in Montana is much different than 5,000 miles in New York City. Falling under that limit can open the door to special discounts or rate reductions. Always check with your carrier to confirm what counts as low mileage for your specific policy.

Coverage considerations for remote workers

Less driving doesn’t mean no risk. Your car can still face threats like theft, vandalism or weather damage, even when it’s parked most of the time. That’s why maintaining the right coverage is still essential for peace of mind and financial protection.

Each of the points below explains how different aspects of your coverage still matter when you’re working remotely or driving less:

• Liability coverage still matters – You’re still responsible if you cause damage while driving, whether it’s to another vehicle, property or person.
• Business use needs special coverage – If you ever drive for work-related tasks (like errands or client visits), tell your carrier. You may need business-use coverage.
• Hybrid workers may need reclassification – If you commute only part-time, your carrier may update your vehicle use from commuting to pleasure use, which can reduce your premium.
• Watch for plan limitations – Some low-mileage car insurance or usage-based auto insurance policies have caps, exclusions or specific eligibility rules.

The key is making sure your policy fits your new habits and doesn’t leave any gaps.

What you should ask your insurance company

When you’re ready to call your insurance company, it helps to know what to ask. These questions make sure your new work from home lifestyle is accurately reflected in your policy. Use them as a guide to uncover potential savings and confirm your coverage still fits your needs.

• Does my commute classification change now that I work from home?
• Are there low-mileage discounts or usage-based programs I qualify for?
• Do I need to update my mileage estimate or vehicle use category?
• If I switch to a pay-per-mile plan, what are the fees, minimums or telematics requirements?
• If I occasionally commute, how does that affect eligibility?
• Does hybrid status count as part-time commuting?

These questions can lead to meaningful savings and help avoid surprises later.

How to report mileage changes to your insurance company

Carriers want a clear picture of how you use your vehicle. They rely on this information to set your rates fairly and ensure your coverage matches your habits. Be ready with a realistic update that accurately reflects your driving routine. You may be asked to:

• Provide your updated mileage estimate – Give your carrier an accurate picture of how many miles you expect to drive this year based on your current habits.
• Explain your commute frequency – Clarify how often you drive to work versus how many days you work from home so your vehicle use can be reclassified correctly.
• Keep documentation organized – Save odometer readings, telematics data or driving app logs in case your carrier requests proof of mileage.
• Follow telematics or pay-per-mile guidelines carefully – If you enroll in a usage-based insurance program, follow setup steps and monitor your driving data for accuracy.

A quick phone call or online update could be all it takes to adjust your rates.

Step-by-step: how to update your auto insurance after switching to remote work

Don’t let old policy details cost you money. Your coverage should reflect how and when you actually drive so you aren’t paying for coverage that no longer fits your needs. Here’s how to make sure your auto insurance aligns with your new driving reality and supports your current lifestyle.

Checklist before you call your carrier

• Review your current policy – Look for commute classification, mileage estimate and any existing discounts or telematics programs.
• Note your odometer – Estimate your new annual mileage.
• Clarify your work setup – Are you fully remote? Hybrid? Commuting a few times a week?
• Research carrier programs – See if they offer low-mileage car insurance or pay-per-mile insurance programs.
• Consider business use – If you drive for work occasionally, bring it up.

What happens after you call

• Receive updated options – You may be offered a revised premium, a new plan option or discounts.
• Request changes in writing – Always ask for email confirmation or updated policy documents.
• Track your driving – Compare actual miles to what you reported.
• Use telematics correctly – Follow installation steps and monitor how your score impacts pricing.

Working from home can lead to lower insurance rates, but the actual savings depend on how much your mileage drops and whether your insurer offers low-mileage or usage-based programs. You won’t see major discounts from remote work alone, since driving behavior and overall risk still play a big role. Think of remote work as an opportunity to save rather than a guarantee you will.

Frequently asked questions

Can I switch to a pay-per-mile plan if I work from home full-time?

Yes. Many carriers offer pay-per-mile insurance programs if your mileage stays low and you’re open to using a tracking device or app. Ask about fees, minimums and how your miles are calculated to understand what impacts your cost. Be sure to compare several insurance companies since each company structures pay-per-mile plans a little differently. These plans can be ideal for remote workers or hybrid employees who drive much less than average.

Do I still need collision and comprehensive coverage if I drive very little?

Usually, yes. Your car is still vulnerable to damage from theft, weather or accidents, even when parked. Even if you don’t drive much, comprehensive coverage can protect against non-driving risks like storms or falling branches.

Do I have to tell my carrier I’m working from home?

It’s smart to do so. Carriers won’t update your classification or mileage estimate unless you inform them. Updating your carrier helps ensure you’re paying the right rate for your actual risk level. It can also prevent issues if you ever need to file a claim, since outdated usage information could complicate the process.

Will a hybrid work arrangement disqualify me from low-mileage discounts?

Not necessarily. Be honest about how often you still commute. Some carriers offer prorated discounts or flexible programs for hybrid employees. You may still qualify for savings as long as your total mileage remains lower than traditional commuters, so accurate reporting is key.

How much can I really save by driving fewer miles?

It varies. Low-mileage car insurance savings can range from 5% to 20% or more. The actual amount depends on your carrier, your mileage drop and other personal factors.

Working from home gives you the chance to rethink your auto insurance for remote workers, and potentially save. If you’ve updated your daily routine, your policy should reflect that. Check your mileage, call your insurance company and ask about car insurance for people who rarely drive options that fit your new lifestyle. If you want help comparing policies or understanding your choices, the VIU by HUB Advisory Team can guide you through it. You’ve already cut the commute. Now cut the cost.