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High Fuel Costs Benefit Auto Insurers

admin — Mon, 25 Aug 2008 09:26:54 +0000

The price of crude oil, which has been reaching unprecedented heights throughout 2008, has harmed many businesses in America. However, one type business has benefitted from the high costs of fuel in the US: the automotive insurance provider.

The US Department of Transportation reports that US the amount of miles covered by US drivers during the month of April, 2008 decreased by 1.4 billion, as compared to April 2007. During March of 2008, American motorists covered 4.3% fewer miles, as compared to March of 2007. That percentage represents the biggest annual decrease in miles driven by US motorists since 1942, when the US Department of Transportation started keeping track of this figure in the first place.

These decreases, clearly prompted by the rising costs of gas, have yielded fewer accidents on the road. Fewer accidents result in fewer demands for money placed on auto insurance providers. Allstate, one of the biggest companies to dominate the American automotive insurance market, reported yesterday having received 4.2% fewer claims resulting from property-destroying vehicular accidents during the second quarter of 2008. Additionally, fewer policyholders have been filing claims for injuries received during the course of automotive accidents–since 2007, that figure has decreased by 7.6%.

On the stock market, the price of Allstate shares has decreased by 12% during 2008. However, the company is doing significantly better than the Standard & Poor index for insurance companies as a whole, whose value in 2008 decreased by a total of 27%. Meanwhile, the shares of Allstate’s rival auto insurance provider, Progressive, have gone up by over 4% during the course of the year. The shares of State Auto Financial Corp. have gone up by 0.4%.

Finance expert Bijan Moazami expects auto insurance companies’ success to continue as long as fuel costs continue to rise. “If gas prices remain high and economic activity slowth further,” he wrote today, “we believe that improved auto-loss trends will continue in the future, leading to stronger underwriting profitability… for auto-insurance stocks.”

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Tags: improved auto, today, automotive insurance, allstate, gas prices, Second Quarter Results

High Fuel Costs Benefit Auto Insurers is a post from: Peppercoin Insurance

Pre-Paid Gas Is It Worth It

admin — Sat, 02 Aug 2008 19:32:58 +0000

Consumers are getting hit and hit hard at the gas pumps. The price for gas is on the rise with no relief in sight. This is distressing to motorists who are on the constant lookout for new ways of saving gas.

Hybrids, car pooling, and scooters are popular methods and now pre-paid gas cards are added to the mix.

Steven Verona developed MyGallons.com which offers members a pre-paid gas card. The card is accepted at any stations that already accept credit cards which is attractive to drivers. Essentially, motorists pay an annual fee of $29.95 for the ability to lock in current gas prices. They pre-purchase an amount of gas at current levels and use that at the pumps should prices rise again.

The price of the locked in amount depends on the average cost of gas for the customer’s zip code.

While supporters are hailing MyGallons.com for providing a great service for drivers tired of paying high prices there are several experts who are sceptical.

These experts state that it is nearly impossible to accurately predict the path of gas prices. While the national average is the highest it has been in decades there were several occasions where it dipped low before sky rocketing. Consumers are taking a gamble that the current gas prices are going to remain low; a gamble that is possible to loose.

What’s more, is that MyGallons.com is a new company causing several consumers to take pause. Should the company go out of business then consumers are left holding the bag with little opportunity to get their money back. There is a possibility that consumers might have to wait several months for prices to rise making the invested cash essentially useless.

It is advised that consumers who wish to participate in the pre-paid gas program buy only a few gallons at a time as a way of testing waters before investing anything significant.

Are Gas Rebate Cards A Good Idea?

admin — Tue, 17 Jun 2008 05:00:14 +0000

Many credit cards offer amazing perks to entice customers into signing with them. Often times these rewards are discounts at hotels, airline tickets, and other like benefits. A reward that is garnering more attention these days is the chance at free gas.

Gas rebate cards are especially tempting with record breaking oil prices promising to increase gas far past $4 a gallon. In an effort to save some green, consumers are searching for deals anywhere they can find them and one of those places happens to be credit cards.

This is seen as irony to many who view credit cards as the scourge of a debt free future. In reality, credit cards do not have to ruin anyone credit rating if used responsibly. For those able to use credit cards sparingly and afford to pay off the monthly payments these gas rebate cards can really benefit from gas rebate cards, and really most of the reward credit cards that are out on the market today.

Gas rebate cards offer a percentage back on gasoline purchases as long as certain requirements are met. Like other reward cards you will have to “earn” the rebate before being able to use it. If you plan on getting a gas rebate card you will need to understand the terms and conditions of that card in order to benefit from the free gas. Many times, cards will offer introductory rates for a limited period of time and then lower that rate.

For example Credit Card ‘A’ offers a rebate of 15% for the first 3 months and then drops it down to 5%. Credit Card ‘B’ offers a rebate for 10% for the first few months and then lowers it to 7%. While Credit Card ‘A’ will look great at first glance, consumers need to realize that after the initial rate, after that first 3 months, the rebate will only be 5% where as Card ‘B’ will be at 7% after the introductory period. Sure, during those first few months you can be saving up to 15% on gas, but afterwards you’ll only save 5% when you could be saving 7%.

This is an important fact to consider as you look for a gas rebate card. Another factor is your spending and driving habits. Since reward cards are usually available at a higher APR, Annual Percentage Rate then other cards if you keep a balance on you card you may want to search for a lower interest rate instead of a card that gives you perks. You will probably end up spending more money on fees and penalties if you choose to go with a gas rebate card with a high APR instead of a regular credit card with a low APR. Ideally, your credit card should works towards your benefit instead of the benefit of the credit card company.

As for driving habits, those with short commutes or for those who only drive on the weekends will really not see much of a benefit from a gas rebate card. However, if you drive an hour or more to and from work or if you find that a large chunk of your income is going to the pumps a gas rebate card just might be the ticket.