Some of the car insurers don't really take into considde3ration the amount of mileage but some do differentiate on the basis of distance. There are different types of factors in this regard that include.

Reasonable estimation

Several insurance companies decide the premium on the basis of estimated average miles that would be driven the insured. This information is provided by the insured. The drivers who drive their cars infrequently get the most out of this discount.

Odometer-based systems

This system is also known as cents per mile now. Once the insurance company has calculated the risk involved in selling the insurance and the insured has come to an agreement on the rate per mile offered, the customer buys insurance per miles just like someone buys gas in gallons. The number of prepaid miles bought is listed on the ID card of the insured person and insurance ends once the limit is reached. The odometer will tell how many miles are left and when to buy more. If a police man stops and checks the insurance then he can simply see the ID card and the odometer to find out the validity. Critics however are of the view that there can be cheating factor involved in this system because the odometer can be tampered with. Though the new technology has brought us electronic odometers that are rather difficult to roll back but still that can be beaten by disconnecting the wires and connecting them later. But if we see it practically, it is not that simple thing to do. If a large sum of miles is bought then to steal insurance odometer will need to reset several times which makes this action uneconomical. When you go for a claim the odometer is checked and if found that tampering has been done then the insurance becomes void as well as the person either may be sent off to jail or punished with a heavy fine. By this system the discount is given automatically if fewer miles are driven and there is no need of installing expensive equipment.

GPS-based system

The GPS based system is one way of tracking how much you drive. A GPS device which is expensive is installed in the car. The device tracks the behavior of the driving and the mileage and then reports the information to the insurance company through cellular phones.

OBDII-based system

Another system used for refraining people from stealing insurance miles was to install a device on the OBD-II port that comes in all cars that are developed after 1996. the catch is that if you don't touch it you will earn a discount with your insurance policy which can be forfeit if the device is disconnected for a specific time period.

Multiple Cars and Premiums

Can have separate insurance polices but if you have them covered under a single policy, most companies will give you a discount that is known as multiple line discount. This is a reward for giving a big premium for all cars to the same company. Another reason for the rewards is that since you have multiple cars the chances of getting into accidents is also reduced. When you go shopping for multi car policies do keep this factor in mind that you are a low risk and so you should get a good discount otherwise move on to the next company. Do apple to apple comparison before deciding because a small discount factor per car can make a huge difference. When you are shopping you should compare the liability, collision and uninsured insurance coverage first with the given conditions and systems offered to you. After that if your information favors low rates you can have more insurance options for peace of mind.