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Changed Your Commute To Save Gas? You May Save On Insurance, Too
Published  03/2/2011 | 2011

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With gasoline prices rocketing toward $4 per gallon, record numbers of California commuters are turning to public transportation to ease the fuel crunch. But they may not realize that a change of commute may save more than just their gas budget.

By consistently reducing the number of miles driven each week, commuters might just lower their auto insurance premiums.

Auto insurance costs rely on a number of factors -- from a driver’s safety record to the type of car being insured. The car’s annual mileage is one of the primary components that determine how much a driver spends on insurance, and some insurance companies offer discounts to motorists who drive less than a predetermined number of miles each year.

California also recently approved new policies known as “Pay As You Drive.” These policies are designed to charge insurance premium based on the miles drivers put on their cars. Though only offered by a few insurance companies to date, more insurers are expected to begin offering PAYD policies in the near future.

When petroleum prices last spiked in 2008, rail and bus ridership levels on rail climbed almost as rapidly as the cost of gas. At the time, the American Public Transportation Association said that use of public transit had hit a 50-year high nationwide.

As unemployment rates rose, use of public transportation declined, but the Los Angeles County Metropolitan Transit Authority reported that average weekday use of MTA bus and rail lines was up 4.6 percent in January 2011 over the same period a year ago.

“As commuters turn to public transit to reduce their household fuel bills, they should report reduced annual automobile mileage to their insurer or insurance agent,” said Candysse Miller, executive director of the Insurance Information Network of California. “While the insurance savings may not completely offset the impact of sky-high gas prices on your household budget, the combined benefit of reduced fuel, maintenance and insurance costs could make public transportation a budget bonus for many commuters.”

Using the California Department of Insurance's premium calculator, a typical California commuter with a clean driving record could save between $100 and $500 a year by reducing their annual mileage by 5,000 miles or more. Results may vary dramatically based on the driver’s personal circumstances and by company. Drivers should consult with their insurance company to see how reducing their mileage may impact their insurance costs and be able to verify changes in their driving habits.

Reducing annual mileage is one of several ways a driver can cut their auto insurance costs. For more information on how to save money on auto insurance and other related subjects, visit Consumer tips and advice are also available on the podcast, “IINC Spots” at

IINC is non-profit, non-lobbying insurance communications association dedicated to helping the public understand insurance and risk management issues.

California Department of Insurance