Soaring gasoline prices may be busting your budget, but look at the bright side: You might get a break on your auto insurance premiums if you’re driving less.
A consumer advocacy group is urging motorists who have changed their driving habits to call their auto insurers or agents to see whether they qualify for a lower premium, possibly 5 to 15 percent.
Reducing your total annual mileage or commuting distance or not commuting in your own vehicle at all could do the trick.
You may hate dealing with auto insurance: “This is fun, though,” said J. Robert Hunter, director of insurance for the Consumer Federation of America. “You can say, ‘How much can I save?’ It’s worth a phone call.”
The idea is the less you are on the road, the lower your chance of having an accident and filing a claim. So driving less can benefit consumers and their insurers. Some stock analysts are predicting that less driving will bolster auto insurers’ profits.
A 5 percent premium reduction would translate to about $55 a year on Connecticut’s average combined premium of $1,096 for 2005, the latest figure available from the National Association of Insurance Commissioners database. A 10 percent premium break would mean nearly $110 in savings; a 15 percent break would mean $164.
On a nationwide average, the 5 to 15 percent savings would run from $47.45 to $142.35, Hunter’s table shows.
Premiums are partly based on how much you drive and how you use your car, and changing those can move you to a more favorable rating category. For instance, if you used to drive 12,000 miles a year but now drive less than 7,500 miles, your insurer will likely lower your premiums: Hunter estimates 5 to 10 percent.
The Travelers Cos. says it cuts premiums up to 13 percent for driving under 7,500 miles a year. The actual reduction depends on other characteristics of the driver and vehicle. For drivers who qualify, a premium reduction could be applied immediately without waiting for the policy’s renewal, said company spokeswoman Sheila Trauernicht.
If you’ve stopped driving to work or school, an insurer can classify your vehicle use as “pleasure” instead of “drive to work” and the savings could be as high as 15 percent, said Hunter, an actuary and former Texas insurance commissioner.
Also, it’s worth asking your insurer whether you get a break if you no longer drive all the way to work but drive to a station and then take a bus or train to the office, Hunter advised. An insurer’s rates may vary by the driving distance of a commute.
For example, The Hartford Financial Services Group has three categories for its Dimensions auto policies sold in Connecticut through independent agents, said Mike Concannon, the company’s senior vice president of personal lines.
The lowest-premium category is driving less than 3 miles one-way to work. Such cars are considered pleasure vehicles for rating purposes, Concannon said. The other categories are driving 3 to 15 miles to work, and driving more than 15 miles.
It’s worth a phone call to ask about premiums because “people who drive less, all things being equal, would benefit from a lower price,” Concannon said.
Some auto insurers offer another price break for gas price-weary consumers to consider - discounts on policies for hybrid vehicles. Travelers was the first to roll out such a discount nationally, offering a 10 percent rate reduction on certain coverages in an auto policy.
