These days, everything can be insured: cars, homes, our health, our pets, various body parts. But would you pay insurance for gas? A Houston-based start-up called LoveMyGasPrice hopes that the answer is "yes".
The premise is pretty simple:
- You agree to pay LoveMyGasPrice $3.99 per month.
- In doing so, you lock in a price cap on gasoline that's around 50 cents more than current prices. So, with today's price for a gallon of unleaded regular hovering around $2.25, you could lock in a cap of $2.75 per gallon, which would be valid for the next 12 months. (Prices are capped around $1 higher in California.)
- Over the next year, LoveMyGasPrice monitors average fuel costs via the U.S. Energy Information Administration.
- If the average price creeps above your price cap, you'll receive a refund for the difference. (To keep things simple, the site assumes that participants use a full 20 gallons of gas per month -- no more, no less -- though there are plans to allow variations in that number down the line.)
Those refunds could be substantial. If, for example, you locked in a rate of $2.75 and gas suddenly shot up to $3.75, you could get $240 back over the course of 12 months.
There are however, some caveats:
- Price caps are re-evaluated every 12 months. So, the awesomely low rate you lock in today might not be around in a year (when most of us think that prices will have risen considerably).
- There's no allowance for premium gas buyers. Why? LoveMyGasPrice says that fuel prices move in lockstep with one-another, so a 50-cent rise in regular prices mean an equivalent 50-cent rise in premium. In our experience, however, that's not always the case.
- There's no allowance for geographic differences, apart from California. This puts folks in the South at slight advantage, since they usually pay less for gas than most of the country. In other words, people in Louisiana or Georgia might get refunds for money they haven't properly spent. It also means that subscribers traveling to California and places with other high fuel prices won't get reimbursed for what they actually pay.
- The site uses PayPal exclusively -- no credit cards, checks, or Square. If you have issues with PayPal, this isn't the product for you.
- LoveMyGasPrice is an online start-up, and it has the customer service to prove it. You can cancel at any time with an email, but if you want to speak to a real person, you're up a creek.