Expensive Fuel Equals Cheaper Insurance, Says State of Idaho
August 15, 2008
Idaho, like most of the country, has been affected by this year’s record-breaking spike in the cost of crude oil The cost of gas in Idaho, like most places in America, has topped $4 per gallon. Statistics from the Idaho Department of Insurance indicates that Idaho residents have coped with this situation by ditching their cars. More and more Idaho residents have started to rely on public transportation, carpooling, biking, rollerblading, or walking, rather than keep paying $40 a week for gas.
As a result, the Idaho Department of Insurance has told Idaho drivers that they may be eligible reductions of their auto insurance rates. Because less driving means lower risk, most insurers are willing to lower policyholders’ rates if the policyholders demonstrate evidence of infrequent automobile use.
Bill Deal, director of the Idaho Department of Insurance, reminded consumers this week: most insurance companies categorize their policyholders according to whether or not they use their vehicle primarily for recreation, or as a primary method of transportation, i.e. for daily commutes to school or work. “Commuters who no longer drive to work may be eligible for an insurance rate reduction,” said Deal.
A driver can save up to 15% on car insurance by changing their vehicle’s price category with their insurer from “used mainly for business” to “used mainly for pleasure.” Deal informed drivers that this is a good time to contact their auto insurance providers to learn their individual providers’ specific policies. Some drivers could start saving money right away, Deal explained.
Deal, additionally, cited information dating from the fuel crisis that struck America in the late 1970’s. According to research carried out in 1979 and 1980, the late-70’s fuel crisis reduced the amount of claims filed with auto insurance companies for a long time, even after the immediate crisis ended. When motorists found their driving limited by the high cost of fuel, they sought new ways to get around, including subways and carpools. These habits stuck, even after fuel costs dropped again. Deal predicts that today’s dramatically rising fuel prices will spark a similar phenomenon.
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