5 Tips to Combat Rising Auto Insurance Rates

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Insurance rates have increased dramatically since 2020. Discover five things you can do about your rate. [[{“value”:”

If you’re a driver, you’ve undoubtedly noticed a steep increase in the price of auto insurance. CNN reports that there are a couple of reasons for this: weather-related claims and supply chain issues. According to insurers, extreme weather events around the country have led to lower profitability for insurance companies and new, higher prices for consumers — even if they live in a state unaffected by extreme weather. And those supply chain issues that arose during the start of the COVID-19 pandemic four years ago have lingered, making it more expensive for companies to pay for repairs.

At this point, the “why” of it all doesn’t matter as much as what you can do about it. Here are five tips to help you combat the rising cost of auto insurance.

1. Don’t believe you’re stuck with your current insurer

No matter how much you might have liked your insurance company in the past or what you think of your agent, periodically checking around for better rates has practically become a necessity. You may be surprised by how much rates vary as you shop for quotes from other insurance carriers.

Many insurers offer online quotes to make it easy to shop. As long as you get quotes for the same level of coverage (or better), you can fairly compare another company’s price with what you’re paying now. You may not even have to speak with a human to switch your policy. But if you prefer to work with a live representative, the best insurance companies offer that option, too.

Finally, don’t assume you’re out of luck if you’re considered a high-risk driver. There are still plenty of companies out there willing to insure you.

2. Pay upfront

Some insurers offer a nice discount if you pay your entire premium upfront. Let’s say you receive a quote for six months of coverage for $600. You can either make monthly payments of $100 (plus a small fee) or pay $600 upfront. If you decide to pay upfront, the average discount hovers around 10%. So now, instead of paying $600, you’ll pay $540.

3. Set up automatic payments

Automatic payments means your insurer won’t worry that you’ll forget to pay every month. Whether you make payments from a checking account, debit card, or credit card, setting up autopay may save you another 5% to 10%.

4. Seek out discounts

Even though they’re raising their rates, insurance companies know they’re also competing for business. That’s one reason why so many offer a wide range of discounts. If you haven’t looked at your current insurer’s discounts lately, now is the time. Here’s a sample of some of the most common discounts:

Safe driverDefensive drivingDriver’s educationLow-mileage drivingGood studentDistant studentBundled coverageMulti-carContinuous coverageNew carVehicle safety featuresMilitaryOnline-only discountPaperless

5. Increase your deductible

A car insurance deductible is the amount of money you pay before the insurance company kicks in and pays the remainder. Let’s say you have a $1,000 deductible. You’re in an accident, and your vehicle requires $5,000 in repairs. You’re responsible for paying the first $1,000, and your insurance company will pay the rest.

Raise your deductible, and your insurance company will reward you with a lower premium. That’s because the company knows it won’t have to pay out as much in the event of a claim. How much your premium will fall depends on the insurer.

If you can think of about 1,000 things you would rather do with your money than pay for auto insurance, you’re not alone. Fortunately, there are simple steps you can take to bring your premiums under control.

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