It would appear to be a simple equation: High gas prices cause fewer people to drive, which mean there are fewer accidents. And fewer overall accidents would mean that auto insurers wouldn’t pay out as much money, which means that rates for insurance should be less. However, for some reason this hasn’t been the case.

Even though there are a few states that have witnessed a reduction in insurance costs (California), many others have witnessed increases (North Carolina, New York). Overall, there has been a steady rise in insurance, even the last few months when drivers have been staying off of the roads a significant amount. In fact, premiums have actually gone up 1.7%, which is an increase of more than four times the increase rate for this period in 2007.

Why is it that Americans are driving less, yet getting higher insurance premiums? Insurers blame the increasing cost of raw materials, everything from steel to paint to plastic, as the cause of the increase, but there is much skepticism about this. States that are regulated more heavily tend to provide better consumer prices, and these states look at the insurance industry as suspect when it claims it needs to raise rates.

Accidents have also declined due to fewer drivers on the roads. However, it is still important to have a good road service program. After all, you never know when you will experience an accident or a breakdown.