The Consumer Federation of America said today it has done an analysis that found as motorists drive less due to high gasoline prices, they could qualify for an average reduction of 5-to-15 percent on their automobile insurance rates.
Drivers were urged to contact insurers to see if they were eligible for a rate cut.
CFA said the average savings would run from about $47 to $142, noting that in 2005 average auto insurance premium in the United States was $949, according to National Association of Insurance Commissioners data.
As drivers react to high gas prices by using mass transportation, car-pooling, taking fewer trips to the store or curtailing their vacations, it could mean immediate savings on auto insurance, CFA said.
"Auto insurance rates are partially based on how much you drive and how you use your car," said J. Robert Hunter, CFA insurance director.
Mr. Hunter, a former Texas insurance commissioner and federal insurance administrator, advised consumers that if they "drive less to save money on gas, these driving changes might mean that you qualify for immediate insurance rate relief."
CFA, he said, encourages "all Americans to act now to save money by calling their insurance company or agent and asking if they qualify for an immediate rate reduction."
CFA said for motorists who stop driving to work or school, their insurance classification has changed from "Drive to Work" to "Pleasure," and savings could be 10-to-15 percent.
For those who now drive only to a train or bus station instead off all the way to work, CFA noted their mileage change may qualify them for a similar savings and the same goes for persons who have consolidated trips and are driving less.
"While these savings will vary based upon the specific auto coverage you have, it is certainly worth a call," said Mr. 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."
CFA noted that, in a letter sent earlier this week, it called on the nation's governors to act immediately 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," Mr. Hunter said. "Whether this will mean windfall profits for insurers or rate cuts for the consumers is up to governors and state regulators to determine," he said. "We ask that each state immediately call hearings to determine the right auto insurance prices under the changed driving situation."
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