State Law Requires Insurers to Verify Your Annual Mileage

Under California law, auto insurers are required to verify vehicle mileage at least every three years, including current annual mileage and miles driven to and from work and/or school.

The state requires insurers to collect this information so that they can price their policies according to a policyholder’s risk and ensure that drivers who spend more time on the road pay a higher premium than those who drive less.

While insurers will typically request that their policyholders provide estimates of their annual miles driven, the companies are allowed under California to verify mileage by accessing various state databases.

Typically, insurers will request this information when a policy is written and/or upon renewal.

What’s required of drivers

An auto carrier may require its policyholders to provide the following information under California law:

• Whether the vehicle is used for commuting purposes, and the location of the workplace, school or other destination where it is driven.
• How many miles (if any) the policyholder drives the vehicle in the course of employment.
• The number of days per week the vehicle will be used for commuting.
• An estimate of the number of miles to be driven for pleasure or other purposes.
• The approximate number of miles driven for any period within, but not to exceed, the previous 24 months.
• The reason for any differences between the estimate for the upcoming 12 months and the miles driven the previous 12 months.
• The current odometer reading of the vehicle.

Insurers can also ask for, but can’t require:

• The policyholder to produce service records which document the odometer reading of the vehicle to be insured.
• The policyholder to install a mileage tracking device that is either provided by the insurer or made available to the insured to accurately collect vehicle mileage information.

When insurers ask for, but do not receive the information, they are allowed to use the California Department of Insurance permitted 12-month mileage estimate of 13,000 miles.

Finally, state law permits insurers to obtain and use smog-check odometer readings from the California Bureau of Automotive Repair, the California Department of Motor Vehicles, or any other governmental agency that maintains odometer readings to estimate annual miles driven.

The takeaway

It’s important that policyholders are honest about the miles they drive. If an insurer learns that a policyholder has been low-balling their mileages, they may non-renew the coverage.

You can measure your miles to work on the drive and you can look at your last repair bill to estimate how many miles you have driven, in order to project your total miles driven for a given year.