In addition to the U.S. nearly doubling its oil production in recent years, countries like Russia and Saudi Arabia have continued to produce at the same levels, while Iran, whose production had been stifled by sanctions, is expected to add even more oil to an already flooded market as sanctions are lifted.
The oil industry is in a period of deep downturn, with about two-thirds of existing oil rigs being decommissioned and new exploration grinding to a halt. Larger oil companies are losing money and many smaller ones have gone bankrupt, with an estimated 250,000 oil workers losing their jobs in 2015 and 2016 so far. The stock market in the U.S. and other countries has also declined at least partly due to the impact of dropping oil prices.
What Lower Gas Prices Mean to Consumers
While the oil companies and their investors may bemoan the drop in oil and gas prices, consumers have benefitted from having more disposable income to spend on food, clothes, and electronics, among other things. Consumers have also taken the opportunity to drive more, since their gasoline dollar can take them much further than it did a few years ago.
Although the total number of miles driven by Americans in 2015 is probably impossible to calculate, definitive measures such as the number of cars driven through toll booths have indicated an increase in driving amounts as gas prices have dropped. In June and July of 2015, for instance, more cars passed through Maine tolls than have ever been measured before.
Another indicator of an increase in miles driven is the increase in auto accidents that top insurers have reported for 2015. In the first 9 months of 2015, Allstate reported a net underwriting loss of $13 million for their auto insurance part of the company. In 2014, they had net underwriting income of $539 million. GEICO also saw a huge drop in their underwriting income in the same time period.
Allstate CEO Tom Wilson has stated that increased accident frequency is the reason for their huge drop in revenue. More accidents means more claims paid out, which means less income for the company. Allstate, which includes Esurance and Encompass, has filed for increases in rates going forward to try to recover from this massive increase in claims. Because of the process of filing for increases, consumers are more likely to see increases in their premiums this year as their auto policies renew.
It may seem unfair to raise everyone’s auto insurance rates because of the increase in accidents. Obviously, not everyone had an accident last year. It is currently unclear whether the increases will be across the board or will be targeted increases based on driving records and the amount of miles driven. Auto insurers use complex algorithms to determine how to set rates. Due to the changes in how people are driving as gas prices come down, the algorithms will likely be adjusted, which could affect everyone.
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The oil industry is in a period of deep downturn, with about two-thirds of existing oil rigs being decommissioned and new exploration grinding to a halt. Larger oil companies are losing money and many smaller ones have gone bankrupt, with an estimated 250,000 oil workers losing their jobs in 2015 and 2016 so far. The stock market in the U.S. and other countries has also declined at least partly due to the impact of dropping oil prices.
What Lower Gas Prices Mean to Consumers
While the oil companies and their investors may bemoan the drop in oil and gas prices, consumers have benefitted from having more disposable income to spend on food, clothes, and electronics, among other things. Consumers have also taken the opportunity to drive more, since their gasoline dollar can take them much further than it did a few years ago.
Although the total number of miles driven by Americans in 2015 is probably impossible to calculate, definitive measures such as the number of cars driven through toll booths have indicated an increase in driving amounts as gas prices have dropped. In June and July of 2015, for instance, more cars passed through Maine tolls than have ever been measured before.
Another indicator of an increase in miles driven is the increase in auto accidents that top insurers have reported for 2015. In the first 9 months of 2015, Allstate reported a net underwriting loss of $13 million for their auto insurance part of the company. In 2014, they had net underwriting income of $539 million. GEICO also saw a huge drop in their underwriting income in the same time period.
Allstate CEO Tom Wilson has stated that increased accident frequency is the reason for their huge drop in revenue. More accidents means more claims paid out, which means less income for the company. Allstate, which includes Esurance and Encompass, has filed for increases in rates going forward to try to recover from this massive increase in claims. Because of the process of filing for increases, consumers are more likely to see increases in their premiums this year as their auto policies renew.
It may seem unfair to raise everyone’s auto insurance rates because of the increase in accidents. Obviously, not everyone had an accident last year. It is currently unclear whether the increases will be across the board or will be targeted increases based on driving records and the amount of miles driven. Auto insurers use complex algorithms to determine how to set rates. Due to the changes in how people are driving as gas prices come down, the algorithms will likely be adjusted, which could affect everyone.
automobile insurance, buy car insurance online, car insurance quotes colorado, auto insurance price quotes, car insurance in usa, personal injury attorney, car donation centers, personal injury attorney
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