High gas prices mean fewer auto accidents-Buffett

Warren Buffett answers a question during a news conference in Madrid May 21, 2008. REUTERS/Andrea Comas

NEW YORK (Reuters) - Billionaire investor Warren Buffett said on Wednesday high gasoline prices were resulting in a decline in auto accidents.

“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,” Buffett told Reuters in an interview. “That partly reflects people driving less.”

Buffett is chief executive of Berkshire Hathaway BRKa.NBRKb.N, the parent company of Geico, one of the largest U.S. auto insurers.

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. “If they don’t take their car out of the garage, we are not going to have an accident,” he said.

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.

Reporting by Lilla Zuill; editing by John Wallace