Save on Car Insurance
Rising Gas Prices Could Lead to Lower Auto Premiums for Some Drivers
Jun 16, 2008
The rising cost of gas has been a huge problem for many Americans, leading many of them to drive a lot less this summer. But there is a silver lining for some consumers -- lower automobile insurance premiums.
Each case is different and drivers need to check with their own insurers for the full details. However, since insurance rates are based, in part, on how a driver uses his or her car, major changes in behavior can lead to comparable changes in premium. The Consumer Federation of America released an analysis in June that said consumers who are driving less this year could see an average savings of 5% to 15% on their automobile insurance rates.
If you have changed your driving habits this year you may be able to get a cheaper policy by calling your agent or insurer. Here’s how:
Changes in Commuting Habits
If you used to drive to work and are now taking public transportation or getting a ride with a spouse or friend, you could get a discount on your auto insurance by reclassifying your car from “drive to work” to “pleasure.” Savings could be as high as 15%, according to the Consumer Federation analysis.
Individuals who have stopped driving to work and instead are driving to a train station or bus stop my also be eligible to change their classification from “drive to work,” saving as much as 10%.
Driving Fewer Miles Per Year
Consumers who are driving substantially less because of gas costs will decrease the miles driven per year. This is especially true if the change in habits means driving less than 10,000 miles a year in total, since many insurers use that amount as a dividing line for setting rates. If you are consolidating or cutting out car trips you may be able to cut your insurance premium by 5% to 10%.
Potential Savings of Several Hundred Dollars
Since these numbers are averages, not all people will see a significant difference. Those who are paying the highest rates and who make the biggest changes in driving habits may benefit the most. A driver paying the average rate in Massachusetts -- about $1200 a year -- could save as much as $180. In a state like Wisconsin, with an average rate of $686, a driver might only save $100.
Auto insurance rates are based on far more than just mileage -- age, driving history, type of vehicle and where you live are also key components in setting the rate. But if you’ve made a substantial change in your driving habits it’s definitely worth a call to your agent to explain what has changed and see if you could get a lower rate.
