Americans are driving less and less as oil prices continue to hold at relatively high levels, but despite the decrease in road usage, insurance companies aren't dropping their rates. Typically, distance driven is directly correlated with the likelihood of crashes - that's the basic theory that underpins usage-based insurance rates - but the market isn't reflecting that relationship at the moment.

In fact, some insurers are going in exactly the opposite direction - raising rates despite fewer vehicle miles traveled. The average increase is 7% in New York according to a state official, and other states have seen rises of 3% to 13%, with only few states seeing rates drop as they should, reports The New York Times. California, with its large motoring population, is among the states with falling rates, but the national average is still an increase of 1.7%.

That rate of increase represents a quadrupling of the the rate before oil price spikes began in 2007. Though it's a widely recognized problem, only New York and a handful of other states have stepped forward to object to the price-hiking practice. Insurance companies defend their rate rises with talk of increased costs due to higher energy and materials prices, but the insurance rate rises are rapidly outpacing the supposed underlying costs increases in many states. A more insightful analysis of the situation could be that insurance companies are in fact hedging against an expected period of prolonged inflation.

New York continues its role as a model for pro-active state action on the matter, successfully challenging Geico's proposed rate increases and warning all other agencies it would not approve any rate hikes until they responded to a request for the relationship of the higher premium prices to decreased driving habits, higher fuel prices and accident trends. New York is in a somewhat unique position in that it must approve insurance rate rises before they can be enacted by the companies, while other states simply investigate rates after the fact if they seem unfair.