Rising Gas Prices Unlikely to Yield Major Car Insurance Savings, Insurify Reports

Gas prices in the United States have risen to a national average of about $4 per gallon following conflict in the Middle East and a U.S. military blockade of the Strait of Hormuz. Fuel costs have increased by 37% since the start of the war, according to insurance-comparison marketplace Insurify. Oil prices have exceeded $100 per barrel as a result of these events.

gas prices typically prompt consumers to reduce the number of miles they drive. A 10% rise in gas prices leads to an average 3% reduction in driving, Insurify reported. Fewer miles driven can result in fewer accidents and potentially lower car insurance premiums.

However, Insurify's report states that a 10% reduction in total mileage this year would lower the average annual insurance premium to $2,209 from the current $2,222. This change would save the average person $27 per year. Even with reduced driving, the same person would spend an additional $385 on gas in 2026, according to Insurify.

“Gas prices might overwhelm the savings they could get from insurance, especially if you're driving a lot," Matt Brannon, a senior analyst at Insurify, told CNBC.”

benefit from reduced driving and fewer accidents, but these gains are offset by a 4% year-over-year increase in auto parts costs, Insurify noted. Progressive warned in March that retaliatory tariffs and rising auto parts costs could pressure profit margins and lead to rate hikes.