NY drivers save on insurance as companies eye gas

NEW YORK Oct 14 (Reuters) - New York's motorists will save a total of nearly $515 million because several insurance companies decided to withdraw or curb rate increases they sought after being told to consider that rising gas prices have clipped driving, New York Gov. David Paterson said on Tuesday.

Some 43 car insurance companies, whose policies protected 75 percent of the state's drivers, were waiting for the state's insurance department to rule on rate requests on Aug. 6, when the regulator told them "to demonstrate how they were factoring in reduced driving when setting new rates," the Democratic governor said in a release.

New York's car insurance rates are the third highest in the nation and New Yorkers would have had to pay an extra $600 million had the increases been approved, he added.

"It's simply counterintuitive to increase rates by eight percent when people are driving less," Paterson said.

Each year, New Yorkers spend about $10 billion on auto insurance premiums, he added. (Reporting by Joan Gralla in New York; Editing by Tom Hals)