Insurers want to know how many kilometers you drive daily, to and from work, as well as your average annual kilometer range. The amount of time you’re on the road influences the risk factor of your car and driving. When you’re on the road more, you’re more likely to make an insurance claim. Drive less, and you’re less likely. The premium you pay reflects this.
Reporting Your Car’s Mileage
On the face of things, it seems that you’re on the honour system about reporting mileage to your insurer. However, you may be reporting your mileage in ways you never think of as connected to your insurance policy. For most motorists, any discrepancy in reported and actual mileage might be at best a poor estimation or at worst a bit of a white lie, neither of which are likely to jeopardize your standing with your insurance company.
When you list the car you drive to and from work as pleasure use only, then there is a fraudulent misrepresentation. If your insurance company finds out, they can void your policy and deny your claims in an accident.
How is Mileage Checked?
How could they know this, though? It’s not like your insurance agent is going to follow you around. What you may not know is that every vehicle has a unique vehicle identification number. This VIN is located in several places around your car and, in Canada, it’s on both your car ownership and pink insurance slip. Garages, dealerships and even oil change shops identify your vehicle when it’s in for service, and they will take an odometer reading to schedule your next visit or determine what service is required. If your car has been in an accident, the VIN is again recorded and uploaded. These databases can be searched by VIN number, and a history of your car starts to take shape. Once odometer readings are compared, your insurer will have a very precise idea of exactly how much you drive and what is happening with your vehicle.
The VIN number is also used by online car reporting services. Using just the VIN, you can look up plenty of public domain information about your car. Subscribing to premium services through these sites can give you access to extensive service history for a vehicle, perhaps one you’re looking to buy.
So yes, insurance companies are quite interested in the mileage of your car, and it’s quite likely they’ve taken a closer look than you might imagine.