Americans are driving like crazy - and it's a disaster for Allstate

Americans are driving like crazy this summer.

And while this is good news for carmakers, highway rest stops, and vacation destinations, it has turned out to be very bad news for insurance giant Allstate.

In its second quarter earnings report on Monday night, Allstate reported earnings per share that were down 38% from a year ago, which the company said reflected the "increased frequency and severity of auto accidents."

Allstate added, "The increase in auto accidents is broad-based by state, risk class, rating plans and the maturity of the business, and consequently appears to be driven by external factors."

This means that basically anyone and everyone is getting into accidents.

In pre-market trade on Tuesday, Allstate shares were down nearly 5%.

And the simple reason why is found in this chart, showing the huge surge in vehicle miles driven this year.

The most obvious source of the surge in miles driven in the decline in gas prices.

Compared to last year, gas prices are down about $0.90 a gallon while the price of oil is more than 50% below where it was a year ago.

And while gas prices bounced back in the spring as the price of oil stabilized, oil prices have declined further in recent weeks, which could press gas prices even lower and do nothing to slow the trend of Americans driving like crazy.

On Monday, we learned that auto sales in July rose to a seasonally-adjusted annualized rate of 17.55 million, blowing away expectations and marking the third straight month of sales over a 17 million vehicle pace, the first time this has happened since 2000.

And so with the economy if not taking off at least appearing to stabilize around 2%-2.5% growth per year, people seem to be getting back to a quintessential American activity: buying and driving cars.

Here's the chart of oil and gas prices. Good news for you, bad news for your auto insurance provider.