Auto insurance claim frequency is rising, in some casesprecipitously, as gasoline prices have declined from the highlevels seen in 2008, meaning more people are spending time on theroad, according to regulators and two large insurers.

“We have seen some disturbing increases,” said Anne Kelly,casualty actuary for the New York State Department ofInsurance.

She said that from the combined effect of frequency and severityof claims for personal injury protection no-fault coverage, heragency has “been seeing increases pushing toward 10 percentannually.”

Her information, she said, comesfrom second-quarter data via the Fast Track Monitoringsystem–which, while not including data from all carriers, “we thinkis a pretty reliable benchmark.”

The PIP coverage, she noted, is where costs are going up thefastest, but such increases are not the case for all autolines.

Claim frequency increases have also been noted at The Hartford.Last week, in answer to an analyst's question, Juan Andrade,president and chief operating officer for property and casualtyoperations at the insurer, said that “what we are seeing is anuptick in auto frequency, particularly in auto liability…”

Mr. Andrade said the upswing was “clearly driven by an increasein miles driven as gas prices have become more normalized.”

In the third quarter of 2008, he noted, “gas prices weresignificantly higher. Miles driven came down precipitously and nowwe are starting to see them come back up.”

The frequency increase, however, will probably not be aconsistent pattern throughout the nation, and insurers will beimpacted differently depending on where their books of business arelocated, according to Robert P. Hartwig, president of the InsuranceInformation Institute in New York.

Mr. Hartwig, an economist, said that unquestionably people aredriving more these days–a trend helped by relatively stable gasprices and an economy that is beginning to recover.

Since reaching a high in July 2008, when gasoline in some placeswas selling at $4 per gallon, the price level for regular in moststates has now dropped below $3.

Mr. Hartwig noted that in 2008, when miles driven and claimfrequency declined, there was the dual shock of the record fuelcost “and the economy falling off a cliff.”

“I predict now we will see an end to the decline in auto [claim]frequency, and then it will move back up,” he said, noting that theincrease will come more slowly in states feeling a deeper impactfrom the recession such as California, Florida and Michigan.

The overall situation, he said, is akin to what occurred in the1970s, when the OPEC-driven oil crisis sent gas prices spiking at atime when the economy was in recession.

We “saw a resumption of frequency after falling for severalquarters,” he recalled, and noted that frequency levels within aspan of two years were back to where they were before the energycrisis.

Gas prices and auto claim frequency also drew comment fromAllstate last week when the company reported its results.

Bob Block, head of investor relations at the carrier, said thenthat reported frequency for both bodily injury and property damageincreased significantly in the third quarter compared to prioryears, but remained at levels comparable to 2007.

He mentioned that “auto frequencies in 2008 were favorablyimpacted by a variety of factors–high gas prices, drop in milesdriven and rising unemployment, to name a few–with last year'sthird quarter being the most favorably affected.”

This year's results “look more like the results we experiencedin 2007,” he said.