Jul 23, 2008 4:00 pm US/Eastern
Gas Prices Result In Insurance Savings
PHILADELPHIA (CBS 3) ―
If you're driving less because of prices at the pump, you're not alone. But that could also mean that you're in for unanticipated surprise -- more cash in your pocket!
Angela Cowan was so fed up with fuel prices, she and her husband made some drastic changes. "He located a job closer to my job so that we could still work in the same vicinity of each other and then just carpool together," says Angela.
She's driving half as much as she used to and that could add up to big savings on her car insurance.
According to Travis Plunkett with the Consumer Federation of America, "how much you drive is a crucial factor in how much you get charged for auto insurance." That's because people who drive fewer miles get into fewer accidents. "Our estimate is that people who are cutting back in major ways, should be able to save between 10 and 15% on their auto insurance premiums," says Plunkett.
The key is to drop into a lower mileage bracket than you were before. Plunkett says, "most companies look at whether you drive fewer than 10 thousand miles a year or more than 10 thousand miles per year, so if you're cutting back and it takes you down below that 10 thousand mile limit, you likely could save some money."
But the premium drop doesn't happen automatically. Your insurance company won't know you're driving less if you don't say something. Plunkett recommends, "place an immediate call to your insurer or your agent and offer to document it if they wish."
Several insurance companies are starting to offer even deeper discounts to drivers who have monitoring devices installed in their automobiles, so the insurer knows where, when and how far the car is being driven.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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