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Driving Less Could Earn Break on Car Insurance

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Gasoline prices are forcing many people to rethink their driving habits. Consumers who are driving less could get a break on their car insurance.

STEVE INSKEEP, host:

If $4-a-gallon gas is causing you to drive a little bit less, you may be saving another way because you may be eligible for lower car insurance rates. NPR's Wendy Kaufman has more.

WENDY KAUFMAN: Insurance rates are based on a number of factors, including how much you drive and how you use your car. J. Robert Hunter of the Consumer Federation of America says consumers who've cut back on their driving should get a break.

Mr. J. ROBERT HUNTER (Consumer Federation of America): For example, if you used to drive to work, say, 20 miles each way and now you're walking to the bus stop and taking a bus all the way, that could be significant - 15, 20 percent.

KAUFMAN: But if your driving habits have changed only slightly, the savings could be much smaller or nonexistent. Insurance companies typically classify the kind of driving you do. So if you stop driving your car to work, your classification could change from drive to work to pleasure. That would likely result in a lower premium.

Similarly, many insurers have a break point at 10,000 annual miles. Drive more, the rates go up. Drive less, the rates go down. Thus, if you're on the borderline, even a slight change in driving habits could result in a lower rate category. Jean Salvatore of the industry-funded Insurance Information Institute encourages consumers whose driving patterns have changed to contact their insurance provider.

Ms. JEAN SALVATORE (Insurance Information Institute): If you've really cut down on your driving, you should definitely call your insurance company and let them know. The thing that people need to remember is that discounts do vary by company and also by state.

KAUFMAN: California drivers could benefit most. Under state law, the number of miles driven is the key element in determining an individual's insurance premium.

Wendy Kaufman, NPR News.

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