If you live in a perpetually congested, metropolitan area like, say, Los Angeles, where the car is king, it's not just your imagination that there are fewer cars on the road these past few months.  Try heading out for an after work cocktail in West Hollywood, and you'll find fewer cars clogging the intersections and more parking spaces than in recent years (well, a few).  The reason can be traced to run-away gas prices -- we're driving less.

How much less? The Federal Highway Administration reported in May 2008 that Americans are driving at "historic lows." The estimated "vehicle miles traveled" for March 2008 fell 4.3 percent compared to March 2007, making it the sharpest dip for any month since the group began tracking traffic-volume trends in 1942.

Of course, that's good news for anyone on the road, but there's a theory floating around the Internet that if we drive less, automobile insurance carriers will lower their rates.  Urban myth or fact?  The connection isn't as far flung as you may think.

When we spend less time on the road, the frequency of car accidents declines. And when car accidents go down, so do claims on car insurance. And, goes the theory, when auto insurers see their costs on claims declining, they respond to market conditions by lowering their rates to stay competitive with other insurers.

I don't know about where you live, but while I've enjoyed a less congested Los Angeles this spring and summer -- roadways feel more like they did 15 years ago -- I have yet to see my insurance premiums drop by even a penny. And since I live in an expensive zip code, I'm hoping it happens sooner than later.

But if we all drive less, and that leads to fewer accidents, that has to lead to lower insurance rates, right? 

The nation's largest auto insurers are the first to see trends in accidents and claims payments due to the sheer volume of their claims data. For example, State Farm, the nation's largest auto insurer, handles about 19 million auto claims a year. That translates to a little over 17 claims per minute, 24 hours a day.

So far, reduced accident claims are not yet leading directly to rate reductions for the insurer. According to State Farm spokesman Dick Luedke, there's no hard and fast rule as to what level of accident reduction would spark lower car insurance rates, but, notes Luedke, "If we saw a reduction as big as 10 percent in accident frequency, we would have reacted long before that."

Says Luedke, "Our actuaries look at claims data not just to see the recent past, but also to see what might change the future, like gas prices."

In other words, there are no big rate drops on the horizon, but it can't be denied that there is a visceral and actual decline in accidents connected to higher gas prices.

"We have just recently seen a decline in automobile claim frequency and if this continues through the summer months, we would probably be able to attribute it to a rise in fuel costs," says Kate Hollcraft, speaking on behalf of Allstate.

Nationwide also reports that their customers are having fewer accidents. While that's  been a trend over the past couple of years, insurer doesn't attribute the drop to higher fuel costs alone. Vice President & Policyholder, Standard Auto Product & Pricing, Larry Thursby believes the reasons can be traced to an aging population that becomes safer drivers, graduated licensing laws for teens and crackdowns in drunk driving. 

So, shouldn't rates be coming down with reduced accident stats pouring in?  Alas, potential rate reductions due to accident frequency are being offset by inflation in medical and hospital costs, repair costs and legal costs.
In other words, the doctors, the lawyers and mechanics fees are eating into our potential car insurance reductions.

Under the banner of "good news/bad news" gas prices dropped this week around the country.  While that's great for our wallet in the short run, it may not be the best thing for our long term insurance rates.

Maybe we should start hoping for $10-a-gallon pump prices.  Or just get a bicycle.