The Downside of Cheaper Gas

published 4 November 2015

With gas prices down by more than $1 per gallon in the past year, Americans collectively are spending $350 million a day less at the gas pump than they were a year ago, says the American Automobile Association. But the drop in gas prices, along with a stronger economy, has led to more driving—and more accidents. And that’s adding up to higher insurance costs.

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Through the first seven months of 2015, U.S. drivers put a record 1.8 trillion miles on the road, says the Federal Highway Administration. The National Safety Council estimates a 10% increase in traffic fatalities over that time compared with a year ago. Geico and Allstate have already reported an increase in the frequency and severity of claims, and both have announced that they are hiking rates. Morningstar analyst Brett Horn expects other insurers to follow suit.

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Dandan joined Kiplinger in June 2015. She fact-checks and writes articles for Kiplinger's Personal Finance magazine and Kiplinger.com. Previously, she interned at The New York Times in Shanghai and CCTV-AMERICA in D.C. She earned an MA in journalism from the University of Missouri.