Insurance News & Articles

Will Higher Gas Prices Mean Lower Car Insurance?

If higher gasoline prices have prompted you to change your driving habits–making you use the bus or subway to commute to work or getting you to substantially reduce your driving around town–you may be able to trim your insurance rates.

The Consumer Federation of America is urging consumers who drive less to contact their insurance companies; these drivers could trim their insurance cost by five to 10 percent a year.

“Most insurers include miles driven and how the car is used as major factors in determining rates, so if consumers have altered their driving habits, they may qualify for immediate rate relief,” said J. Robert Hunter, CFA’s director of insurance and a former state insurance commissioner and federal insurance administrator.

So if you’ve stopped driving to work or school, you may qualify for a lower rate because your car now will be used as one for “pleasure.” Similarly, if you car-pool and only drive to work once or twice a week, you also may be in luck. It all depends on the insurer. You should tell the company.

Hunter also suggested consumers might want to shop around for better rates before renewing their policies.

If you’re going to do that–whether for car or homeowners insurance–then a good place to start your homework is at the National Association of Insurance Commissioners, the group that represents the nation’s top insurance regulatory officials.

The association’s Web site has a helpful complaint database that allows you to see the number of formal complaints consumers have filed against a particular insurer–and how that number compares with other firms. The database is a bit clunky to use and requires that you know the precise name of the company you’re searching. But it’s a good start to the decision-making process, which should take account of customer satisfaction as well as price.

source: http://blog.washingtonpost.com/

If you’ve been driving less to compensate for higher gas prices, you might be eligible for savings on your car insurance.

An analysis by the Consumer Federation of America found that consumers who drive less as a result of higher gas prices could save an average of 5 percent to 10 percent annually — about $47 to $94 — on their auto rates.

J. Robert Hunter, director of insurance for the nonprofit consumer group, said in the report that insurers determined rates based in part on miles driven and how the car was used.
As a result, the decreased use of a car could translate into lower rates for many, if not all, consumers.

The consumer group cited a number of ways that Americans have reduced their driving:
■ Stopped driving to work and school by using other means of transportation.
■ Reduced amount of driving to work or school by car pooling.
■ Reduced car miles by walking to the store or consolidating trips.

The consumer group cautioned that savings, if any, would vary by insurer.

“Every insurer is different when it comes to mileage discounts,” Hunter said. “We urge consumers to call their insurance companies right away to determine if a change in their driving behavior qualifies them for a lower rate right now.”

He also advised people who drive less to shop around.

Based on average premiums, drivers who use their cars less in Kansas might save an average of $38.85 to $77.70, the report said. Missouri drivers might save an average of $41.10 to $82.20.

http://www.kansascity.com/mld/kansascity/business/13731573.htm

Insurance.com, the largest online auto insurance agency in the United States, reports a decrease in auto insurance rates depending on geographical location. The company’s “2005 Auto Insurance Pricing Report” shows a national decline in premiums of 2% or approximately $60 in 2005.

Insurance.com’s report compares the average auto insurance premiums of nearly nine million customers from 2004 to 2005. *

According to the report, 27 states experienced an increase in their auto insurance rates from 2004 to 2005. However, many of the nation’s largest states actually saw their rates decrease. New Yorkers paid an average of $3,165 for automobile insurance in 2005—a 3.4% decrease from 2004. And Louisiana residents paid an average of $3,100—a 4.9% decrease from 2004.

“Competition among the major auto insurers is at an all time high and is a key factor driving down auto insurance rates in most markets,” said Lou Geremia, President of Insurance.com. “We anticipate rates will continue to fall in 2006, making frequent comparison shopping for auto insurance an important tool for consumers who want to save money.”

View the full report

http://www.insurance.com/

About Insurance.com
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In addition to Insurance.com, ComparisonMarket provides private labeled solutions to financial institutions, affinity groups and online marketplaces to offer real choice and savings opportunities on auto insurance.

*Disclaimer
While the “2005 Auto Insurance Pricing Report” is a broad indicator of pricing activity in the personal auto insurance marketplace it reflects only the pricing activity of carriers that have participated in the ComparisonMarket auto insurance marketplace in the states where it quotes (all states except Alaska, Hawaii, Massachusetts, New Jersey) and the aggregate profile of consumers who shop using the ComparisonMarket platform.