Pricey petrol =safer streets in U.S.A
Billionaire investor Warren Buffett said on Wednesday high gasoline prices were resulting in a decline in auto accidents.
Buffett is chief executive of Berkshire Hathaway (BRKa.N), the parent company of Geico, one of the largest U.S. auto insurers. They have experienced a significant decrease in accident claims on the road.
"It (higher gas prices) has reduced driving somewhat, so the frequency of accidents, which was going down somewhat before, has gone down far below what we would have anticipated three or four years ago”, He said.
Buffet continued, "That partly reflects people driving less."
He claims that the rising cost of petrol has reduced the amount of vehicle related accident claims.
Buffett said that while accident rates have dropped. Geico is paying out more on claims as repair costs have risen. "That's a function of inflation-so, the cost per accident has gone up, but the ratio of accidents to policyholders has gone down," he said.
He said the lower-accident trend may grow as people opt to stay home more. Drivers have been hit by a surge in gas prices as oil prices have hit record levels. Gas is more than $4 a gallon in some areas.
Updated on 30/06/2008