Car insurance costs are on the rise, with premiums jumping by 21% in 2024, according to the Bureau of Labor Statistics. For residents in states like California, Minnesota, and Missouri, the increases could even exceed 50%. Along with ongoing inflation and high housing costs, these spikes are pushing many drivers to adjust their budgets. In fact, a recent survey found that 51% of drivers are cutting back on non-essential spending, while 45% are saving less money to cope with higher premiums.
Mark Friedlander, director of corporate communications at the Insurance Information Institute, explains that the rising rates are caused by factors like inflation, supply chain disruptions, and labor shortages affecting car repair parts.
But don’t worry—there are still ways to find affordable car insurance. Here’s a guide on how to keep your premiums low without sacrificing coverage.
1. Increase Your Deductible to Lower Premiums
A deductible is the amount you pay out of pocket when you file an insurance claim. By raising your deductible, you can significantly lower your monthly premiums. For instance, if you increase your deductible to $1,000, you could save between 10% and 15% on your premiums.
Earl Jones, an insurance agent at Missouri Farm Bureau Insurance, highlights that some insurers even offer diminishing deductibles, where your deductible decreases each year you don’t file a claim, making it even more beneficial to opt for a higher deductible.
2. Maximize Your Insurance Discounts
One of the easiest ways to lower your insurance costs is by taking advantage of available discounts. Many insurers offer a variety of discounts, such as:
- Loyalty discounts for long-term customers.
- Low-mileage discounts for drivers who travel less than 7,500 miles per year.
- Telematics programs that track your driving habits and reward safe driving.
Alaina Hixson, Director of Sales and Operations at Churchill Agency, recommends asking your insurer about telematics programs, which can help you save up to 30% on your premium. However, be aware that poor driving habits tracked by these programs might increase your rates, so it’s important to drive safely.
Additionally, check for occupational discounts, especially if you work in public service roles like nursing, teaching, or firefighting. Some companies also offer age-related discounts, particularly for senior drivers who take state-approved defensive driving courses.
3. Regularly Review Your Driving Record
Your driving record plays a crucial role in determining your car insurance rates. It’s essential to periodically check your record for any errors or outdated information that could affect your premiums.
“Inaccuracies can have a huge impact on your rates and discounts,” says Earl Jones. Computer glitches may cause a ticket to appear multiple times, so if you spot any mistakes, be sure to dispute them with the relevant authorities.
If you have tickets or accidents on your record, don’t worry. As time passes, their impact on your rates lessens. After three years, tickets generally drop off your record, and after five years, accidents do as well. When that happens, reach out to your insurer to see if your premium can be adjusted.
4. Consider Your Car’s Make and Model
The car you drive can directly influence your insurance premiums. Insurers evaluate factors such as the car’s safety ratings, the likelihood of theft, and the cost of repairs. As cars become more technologically advanced, with computer systems that are costly to repair, insurers factor these risks into their policies.
Before purchasing a new or used vehicle, compare auto insurance quotes for the cars you’re considering. The Insurance Institute for Highway Safety (IIHS) offers safety ratings for various makes and models, and you may even qualify for a discount if your car has advanced safety features like collision prevention systems.
5. Shop Around for the Best Rates
When it comes to car insurance, shopping around is key. Rates can vary significantly from one insurer to another, so it’s essential to compare quotes from at least three different companies. Don’t settle for the first quote you receive—take the time to explore your options and find the best deal for your needs.
The Bottom Line
While it’s frustrating to see your car insurance premiums rise, there are ways to make your policy more affordable. Increasing your deductible, reviewing your driving record, taking advantage of discounts, and comparing quotes for new cars can all help you lower your premiums without compromising your coverage.
Remember, shopping around for insurance every time you purchase a new vehicle can lead to significant savings. Whether you’re looking for cheap car insurance or exploring ways to save on your current policy, these tips can make a noticeable difference in your monthly budget.
Source: CBS News
