Various studies conducted by the auto insurance industry and the U.S. federal government suggest that drivers can slash their insurance expenses by trying alternative transportation when going to work. According to statistics released by government agencies, a large percentage of Americans who use their cars to go to work can actually cut their insurance costs greatly by exploring alternatives.
Research done on how millions of Americans go to work have revealed that 76 percent drive to work alone each day. Aside from the apparent waste of potential savings, driving alone can also contribute to the presence of carbon dioxide in the atmosphere, further worsening global warming, environmentalists warn. By carpooling, analysts explain, motorists can cut emissions and shave some dollars off their insurance policies.
Insurance providers typically base premiums on risks that policyholders take. This means that more time spent on the road can lead to higher risks that the motorists can get involved in accidents. Less travelling means less risk and eventually, lower rates. By carpooling, workers can reduce the risk of getting into accidents.
Government statistics also show that a measly 12 percent make use of carpooling with other workers. Of the total workforce in the U.S., only 4.7 percent use public transportation. Walking, as an alternative to driving or taking the bus, accounts for 2.9 percent of all workers in the country. Biking also managed to gain a 1.2 percent following. The rest of those surveyed, 3.3 percent, work at home.
Insurance experts agree that by reducing the amount of time spent behind the wheels, policyholders can help minimize the risks that often add to the cost of insurance policies. At present, some states even allow insurers to offer mileage-based insurance policies. While these programs are relatively new, they have managed to attract a considerable amount of interest from motorists looking for ways to slash car insurance expenses.
These programs work by providing coverage with lower rates for motorists who drive less than the pre-determined annual mileage. Analysts say that by basing insurance premiums on how much motorists drive, policyholders can actually get better deals. Instead of relying solely on similar factors, the providers would also take into consideration how often drivers take to the roads. This means that car owners who drive only a certain number of miles each year can pay less than what most motorists pay for insurance. Many industry experts believe that this can set a new trend for the insurance market, resulting in lower premiums.