Just as the cost of fueling up with gas goes down, the premiums for coverage might go up.
As we watch the price of gas falling, it can be easy to think that we’ll be saving a lot of money, that is until the auto insurance premiums start to make their rise and find us spending in a new area.
The price of gas is not directly related to the insurance rates that are charged, but it is indirectly connected.
Although the price being advertised at gas stations does not have auto insurance companies cranking up the dial for their rates, there has been a trend that researchers have identified which makes it feel as though that could be the case. The link between the two is that when the price of gas falls, there are more drivers who head to the roads. They take more trips and longer trips. With more cars on the roads, more accidents occur. It is that factor that causes the premiums to end up rising over time.
Therefore, when gas prices fall for longer than a brief moment, auto insurance rater predictions are for rises.
Over Labor Day weekend, alone, drivers across the United States saved more than $1 billion when compared to what they were spending on gas in 2014. That is a massive savings that encouraged more people to head out in their cars over the long weekend. Unfortunately, that did mean more crashes, more injuries, and more traffic fatalities.
Statistics printed by the Associated Press have shown that deaths in road collisions rose by 14 percent over the first half of this year and that by the end of 2015, they are predicting that road fatalities may break the 40,000 mark for the first time since 2007. This is directly related to the fact that there are more people on the streets and highways because they feel that it is now more affordable to be there.
Moreover, the impact on auto insurance rates exists because the more crashes there are on the roads, the more claims insurers receive. This makes it more expensive for insurance companies to operate, as they have more claims to pay. The outcome is a raise in rates for all drivers, regardless of whether or not they have been involved in a crash.