How Do Car Insurance Companies Know Your Odometer Reading?

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Car insurance companies need to know your odometer reading to accurately calculate how much you drive. Most companies ask you to self-report, but some are finding more accurate ways to check odometer readings. Keep reading to understand how car insurance companies can view your odometer reading and how far you drive.

How do Auto Insurance Companies Obtain Your Auto Odometer Reading?

Car insurance companies get your odometer readings in a variety of ways. They might ask you directly or obtain it via a tracking device you’ve consented to install.Insurance tracking devices come as dongles that you can plug into your car or an app for your smartphone. 

What is an Insurance Tracker?

Insurance tracking devices, also called telematic devices, are used to monitor and track the behavior of insured customers and their property. In the case of auto odometer readings, they will track the total mileage driven and a host of other data. 

The device connects to the vehicle’s computer and then sends data to the insurance company. Data collected includes things like driving behavior, mileage and even barking habits

How Does an Insurance Tracker Work?

Data collected from the tracker is sent wirelessly to your insurance company. This data can affect insurance premiums for better or for worse, depending on how the data collected matches your previous insurance record.

What is a Car Odometer Reading?

A vehicle odometer reading is a physical reading or photo taken of your vehicle’s odometer. With an annual or bi-annual odometer reading, car insurance companies will have an accurate picture of your annual mileage. 

What Data is Tracked?

The precise data tracked can vary by the insurance company. When in doubt, check with your car insurance company. In general, an insurance company will track mileage driven, average speed, traffic conditions, sudden braking, phone use while driving, night driving and accidents. 

These factors contribute to your policy premium in some cases. In fact, they can even cause your premium to increase or decrease, depending on your situation. 

How Car Insurance Companies Use Modern Technology

Insurance companies have used modern technology to reward safe drivers and further refine their models. Insurance is based on projections and probability, like your age, your gender, the model of your car, your past driving history and previous insurance records. These are all factors considered by insurance companies. 

Now, instead of only using probabilities, they can collect real-time data from customers for more sophisticated data analysis and accident probability analysis. Even if it seems invasive, if you drive safely it can mean lower premiums and long-term savings.

How Car Insurers Calculate Vehicle Mileage

If insurers don’t use a mileage-tracking device, they can collect mileage through your personal reporting and databases. Generally speaking, insurers will ask you for an estimate of your total mileage, but they might also take an annual odometer reading for verification purposes as well. 

If they choose to use databases or repair shops’ information, they could have an accurate odometer reading at any point in time. Some carriers also verify vehicle mileage using motor vehicle records (MVRs). It is important to report mileage as accurately as possible to insurance companies for fair premiums and to avoid insurance fraud, according to a 2022 article from Experian.

Is it Legal for Auto Insurance Companies to Track Your Miles?

Insurance companies need accurate mileage information to calculate insurance premiums. The likelihood that you will be in an accident increases the more time you spend on the road. As a result, car insurance companies will charge you more because they view you as a higher risk.

To put it simply, insurance companies give discounts to drivers with low mileage because they reward those who pose a lower risk.

Although they have a right to know your mileage, you will have to agree to install a tracking device or dongle. Some insurance companies don’t require them, while others offer them as an optional feature. If you agree to install the device and allow the insurance company to use that information, it can lead to lower rates if you’re a good driver.

Better Driving Equals Lower Premiums

Keep in mind that evidence of low annual mileage and safe driving could benefit your insurance record and may lead to lower insurance premiums. Whether you choose a smartphone app, car attachment or self-reporting, it’s a good idea to be prepared for unexpected vehicle expenses, maintenance and repairs. 


Do insurers check mileage?

Yes. Typically, insurance companies check mileage to determine how much you drive. They can use this information to calculate your premiums.

Can you get in trouble for lying to a car insurance company?

It is never a good idea to lie to your insurance company. If you feel like you could get a better rate, do your research and check multiple insurance companies.  Q: What is considered low mileage for car insurance?

What is considered low mileage for car insurance?

Most car insurance companies define low mileage as traveling less than 7,500 miles annually or less than 10 miles per day.

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