As Gas Prices Soar, Drivers Urged to Seek Insurance Rate Relief

June 11, 2008

As the price of gasoline tops four dollars a gallon nationwide consumers who are driving less could save an average of 5 to 15 percent on their automobile insurance rates – about $47 to $142.

That’s according to the Consumer Federation of America (CFA), which says that skyrocketing fuel costs could mean savings on automobile insurance as drivers react to high gas prices by using mass transportation, car-pooling, taking fewer trips to the store or curtailing their vacations.

“Auto insurance rates are partially based on how much you drive and how you use your car,” said J. Robert Hunter, director of insurance for CFA and former Texas Insurance Commissioner and Federal Insurance Administrator said in a consumer press release. “If you drive less to save money on gas, these driving changes might mean that you qualify for immediate insurance rate relief.”

His group is urging all drivers to call their insurance company or agent and ask if they qualify for a rate reduction.

While savings will vary based upon the specific auto coverage a driver has, it is worth a call, according to Hunter. “Simply explain the actions you are taking to drive less and estimate how many fewer miles you are driving a month,” he said. “Tell the agent or company representative that you want the cheapest rate they have for drivers reflecting your new driving circumstances.”

His organization also wants state insurance officials to take note.

In a letter sent earlier this week, CFA called on the nation’s governors to require insurance companies to lower their rates as Americans drive less.

“As Americans drive less because of the price of gas, fewer claims will be filed with insurance companies,” said Hunter. “Whether this will mean windfall profits for insurers or rate cuts for the consumers is up to governors and state regulators to determine. We ask that each state immediately call hearings to determine the right auto insurance prices under the changed driving situation.”

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