May 2009

DRIVE LESS AND PAY LESS?

It's well known that carbon emissions from automobile exhaust are a leading contributor to global warming. Yet that doesn't seem to be a compelling enough reason for most people to change their ways and cut back on their driving. 

Driving less is an excellent way to help the environment, cut your gas costs and reduce your chances of being in an accident. It mayalso be a good way to save money on your car insurance, because more and more auto insurers nationwide are quietly offering "green discounts" to their customers. But you won't know until you ask. 

Call your agent or insurer and ask if they offer a "usage based," "pay-as-you-drive" or another discount program that rewards customers who drive fewer miles each year. Ideally you should get two or more quotes and compare. Even if this type of usage-based insurance is not currently available in your state, your phone call will notify your insurer that the demand for green discounts is growing.  

Consumers need to keep the pressure on insurance companies to offer significant discounts. Many insurers have been resisting usage-based premium reductions and insisting that the number of miles driven per year does not predict accident frequency. Consumer advocates have long disagreed and have recently been vindicated by a study published by the Insurance Service Office's Quality Planning Corporation. The study found that people who drove less than 3,000 miles annually had 44 percent fewer claims as compared to the average, while drivers that exceeded 20,000 miles per year had 28 percent more claims.

There are at least 24 companies offering some form of pay-as-you-drive insurance (in 34 states and many foreign countries), with discounts up to 60% for policyholders who drive fewer miles than average. Discounts are also available for customers who drive fuel-efficient or low-emission vehicles. 

If you are already making an effort to cut your annual mileage, don't you think it's about time you get a realdiscount from your insurance company? Start shopping.