The Checkout

Will Higher Gas Prices Mean Lower Car Insurance?

If higher gasoline prices have prompted you to change your driving habits--making you use the bus or subway to commute to work or getting you to substantially reduce your driving around town--you may be able to trim your insurance rates.

The Consumer Federation of America is urging consumers who drive less to contact their insurance companies; these drivers could trim their insurance cost by five to 10 percent a year.

"Most insurers include miles driven and how the car is used as major factors in determining rates, so if consumers have altered their driving habits, they may qualify for immediate rate relief," said J. Robert Hunter, CFA's director of insurance and a former state insurance commissioner and federal insurance administrator.

So if you've stopped driving to work or school, you may qualify for a lower rate because your car now will be used as one for "pleasure." Similarly, if you car-pool and only drive to work once or twice a week, you also may be in luck. It all depends on the insurer. You should tell the company.

Hunter also suggested consumers might want to shop around for better rates before renewing their policies.

If you're going to do that--whether for car or homeowners insurance--then a good place to start your homework is at the National Association of Insurance Commissioners, the group that represents the nation's top insurance regulatory officials.

The association's Web site has a helpful complaint database that allows you to see the number of formal complaints consumers have filed against a particular insurer--and how that number compares with other firms. The database is a bit clunky to use and requires that you know the precise name of the company you're searching. But it's a good start to the decision-making process, which should take account of customer satisfaction as well as price.

By  |  January 25, 2006; 10:00 AM ET Consumer Tips
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