Recovering job market means more cars on the road

Jill Overmyer

As the U.S. economy improves and unemployment numbers drop, another unpleasant little number could be on the rise. Traffic congestion is increasing as workers hop onto the freeway to get to their new jobs.

According to Allstate, traffic congestion is creeping up to its pre-recession levels. And rising employment is the culprit, according to, which cites the latest Traffic Score Card from Inrix, a company that tracks congestion nationally. The scorecard found that the average extra commuting time due to traffic increased by 2 percent between August 2009 and October 2009.

What does that mean for your auto insurance rate? Could increased traffic boost risks that, in turn, raise your premium? And what can you do about it?

More cars on the road means more accidents

It doesn't take actuarial acumen to realize that the risk of being involved in an accident rises in proportion to the number of cars on the road. More drivers need to be on the road at specific times (rush hour) to get to and from work -- and that means more time in traffic and more cars to collide with.

According to a 2008 study published by the Brookings Institution, decreases in congestion bring decreases in accident rates. Yet getting Americans to drive less presents logistical difficulties. The report suggests that making commuters pay more for their daily travel decrease congestion and accidents. High tolls on heavily traveled roads, for example, could encourage carpooling and the development of rapid transit. On the other hand, they could place an unfair burden on low-income families, and some state laws prevent the levying of such tolls.

Discounts for driving less

Recently, it's been auto insurance companies that have presented some possible solutions for congestion. They have an interest in doing so, because the less time their customers spend on the road, the fewer auto insurance claims they'll have to pay. In a novel approach to lowering accident risk, some insurance companies have begun offering "pay as you drive" insurance policies.

How these policies work depends on the company. Some companies sell insurance that covers customers for a certain number of miles, according to the Environmental Defense Fund. Once those miles run out, the insured has to buy more coverage. State Farm, meanwhile, offers drivers the option of letting OnStar technology deliver odometer readings to State Farm. The insurer then adjusts premiums based on how many miles they drive. According to State Farm's website, drivers who travel 11,000 miles annually can expect to save up to 7 percent, while those who drive only 3,500 miles annually can expect to save up to 20 percent.

By tempting drivers with significant savings on their auto insurance premiums, insurers hope to encourage carpooling and the use of public transportation, dropping the risk of accidents. Yet roadblocks also stand in the way of making pay-as-you-drive insurance widespread. Many states prohibit such insurance policies, and some consumers object to the monitoring methods as an invasion of privacy.

See how much you could save today on your car insurance. Get your free auto insurance quotes today!