With gas prices lower, Americans are saving billions of dollars. In 2015, experts forecast that Americans will save as much as $75 billion for this year alone. Collectively, drivers saved as much as $1 billion dollars in gas during Labor Day alone. Since last year, the prices have dropped more than a $1 on average.
While you have benefits, there are also disadvantages to cheaper gas. For example, researchers have shown a correlation between gas prices and more traffic fatalities. Why? People can afford to drive more, so you see more drivers, which leads to higher congestion on the streets, which leads to more accidents. Because of this trend, many leading car insurance companies have hiked their rates, whether or not drivers were involved in accidents. According to Wall Street Journal, both Allstate and Geico have plans to increase their rates. Allstate wants to implement a four percent raise on drivers with car insurance. The CEO of Allstate, Tom Wilson, stated that this is because of the increased rate of accidents.
We do have other reasons for more drivers on the road. For example, the improved economy has led to more drivers on the road, and we have many that give in to distractions, such as texting while driving. Despite the increased crashes, driving percentage has gone up, but distracted drivers are believed to be the cause for the higher increase in fatal crashes. What could suggest this? According to the Insurance Information Institute, the number of collisions involving stationary cars and objects has steadily risen since 2013.
In a recent report from the National Safety Council, they estimated the cost of motor vehicle damage and property damage at more than $152 billion in 2015. That is a 24 percent increase since 2014. While cheap gas does contribute to higher auto insurance, we have seen steady increases in auto insurance each year, so you have other factors that also have led to raised premiums.
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