There are many reasons that premiums can fluctuate, but this winter it isn’t the storms as much as the affordability.
Most drivers see a drop in the price at the pump as being a fantastic way to save money, and this can even encourage more people to head out onto the roads and city streets because it is seen as more affordable, but most also have not taken their auto insurance rates into account.
As much as the gas prices, themselves, don’t cause auto insurance to become more expensive, road use does.
The more affordable it is to drive, the more people there are on the roads. Therefore, when gas prices experience a considerable drop, more people can cover the cost and will get back behind the wheel. However, when there are more people on the road, the risk of a collision also increases, which can directly impact the auto insurance rates that are being paid. The situation is quite a direct one. The more people there are on the roads, the more crashes there are, and the more people can afford to drive, the more they will do so.
Unfortunately, more accidents means that drivers will face increased auto insurance rates as a result.
This situation is not just a speculation. The Insurance Information Institute (I.I.I.) has already pointed out that this is a trend that may show up as soon as the next opportunity for a driver’s auto insurance company has to change rates.
According to I.I.I.’s Lynne McChristian, “The cost of claims, the number of claims goes up,” when there are more people on the roads. She added that “So when the number goes up, insurance goes up to reflect those rising numbers.”
The Insurance Information Institute has identified low gas prices as one of the top causes of the increase in the number of cars that are on the road at any given time. It explained that people are heading out more often, and they’re travelling greater distances.
McChristian pointed out that auto insurance rates are affected when people have the very natural inclination to take road trips as affordable ways to enjoy their free time. “People think ‘hey, let’s take a road trip,’ or they think driving is a better alternative than taking a flight,” she said.