Higher Gas Prices = Lower Auto Insurance Rates

Higher gas prices could have some positive impact on your wallet. If you find yourself driving less to save on the high price of gas, you could wind up saving money on your car insurance.

A recent analysis by the Consumer Federation of America indicated that drivers could save an average of five to 10 percent on their auto insurance rates if they reduced their annual mileage.

"Many insurance companies look at how much you drive each year," said Dave Roush, CEO of Insurance.com, "and a small change in your yearly mileage could result in big savings."

Insurance companies consider whether or not a driver is using a car for business or pleasure, and even reducing the number of miles driven to work each week could result in savings.

The report uses the example of simply reducing miles driven each week from 200 to 175. This small annual mileage reduction from 10,400 to 9,100 could make a big difference to auto insurance rates.

Drivers can cut down on their mileage by car-pooling for work, making fewer trips, or consolidating errands into one trip.

"Insurance companies often use 10,000 miles as a price point in determining auto insurance rates," Roush said. "If you drive less than 10,000 miles annually, you could see a savings of about 5 percent on your premium."

Less driving means less exposure to situations that could result in an accident. This results in fewer claims, encouraging insurers to lower rates.

J. Robert Hunter, director of insurance for the Consumer Federation of America, suggested that it's a good idea if "consumers who are driving less shop around before renewing their policy."

Roush agreed with Hunter's advice. "It's important to regularly confirm you're getting the best deal from your auto insurance. You might find that you've saved several hundred dollars just by spending a few minutes comparing rates," Roush said.