How to get the best car insurance at a cheaper price

How to get the best car insurance at a cheaper price
How to get the best car insurance at a cheaper price

Car insurance rates have gone up – way up. Here’s what you can do to hit the brakes and get the best car insurance for less.

ICYMI, car insurance rates have gone up…way up. According to a recent report from The zebrainsurance comparison site, drivers paid an average of $1,841 to insure their vehicles in 2023. This is 5% more than the previous year and follows a 15% increase that occurred between 2022 and 2023. About many drivers looking to get the best car insurance for the money, this is a frustrating situation.

Where will rates go from here? And what else can drivers do to cut costs? For answers to these questions—and expert insight into why we’re seeing these price spikes in the first place—read on.

Why auto insurance rates are going up…and up…and up

First and foremost, it’s important to note that your auto insurance rate usually increases every year, even if you’ve been an accident-free driver. «Insurance companies need to account for the claims payouts they’ve made during the year and the general costs of operating a business, just like any business does,» explains The Zebra’s Beth Swanson. «If a company has had an excessive number of claims in a particular year, the rates will be adjusted to help offset them.»

More recently, however, there have been some unique factors driving (no pun intended) spending. To understand them, we have to look back to the pandemic, says Greg Smolan, vice president of insurance operations at AAA Northeast. Smolan says that after 2020, drivers developed a lot of bad habits, including less seat belt use and speeding. From there, it’s a ripple effect, with these behaviors leading to more frequent and severe accidents that ultimately hurt insurers’ bottom lines.

There are also repair costs, which have risen along with almost everything else in our economy due to supply chain issues, labor shortages and better technology in vehicles. «That fender bender doesn’t cost a few hundred dollars anymore,» explains Smolan. «That fender bender now has cameras and sensors and everything else in it and costs several thousand dollars.»

Smolan says an increase in thefts, as well as catastrophic weather — everything from floods to high winds — that have become more frequent in recent years have also led to more claims.

So where are auto insurance rates going?

Rising costs have left insurers with essentially one option…raise rates. «We talk to hundreds of people a day who are getting renewals and we know their rates are going up,» notes Smolan. “There are reasons behind it. Insurance companies are not just looking for profit. 2022 and 2023 were two of the most unprofitable years the insurance industry has had.”

So where do we go from here? «Based on historical data, we will likely continue to see rate increases this year,» Swanson notes. «However, how much interest rates will increase is still to be determined.» As economic factors impact insurance rates and business costs for companies, we may see more volatility than normal as this is a big election year.”

Get the best car insurance at the best price

For those feeling the pinch of higher rates, there is good news. Experts say there are steps you can take to (hopefully) lower your costs and get the best car insurance at the best price:

Call your insurer: First, talk to your insurer and ask if there is anything they can do to help lower your rate. There may be a discount you don’t know about. (FYI, some of these may be offered to those who pay for a year of coverage in advance, so take the «Costco» approach if you can and buy in bulk!) There are better deals for those who visit defensive driving courses , or who bundle their auto insurance with another type of coverage (for example, homeowners insurance). There may also be discounts for students with good grades. Your first step is to pick up the phone to ask.

Shopping: If you’ve been with the same insurance company for many years, it’s easy to fall into the «set it and forget it» mentality and assume you already have the best insurance at the best price…but you shouldn’t you get comfortable. There might be a better price out there. Before making the switch, however, check any new insurer you’re considering. «Before you switch, be confident about it, because longevity really does mean something,» says Smolan.

Don’t limit yourself to big names: Swanson says just because an insurance company has a name you’re unfamiliar with, don’t rule them out. There are smaller regional carriers that often offer great service and affordable prices. «Just because you haven’t heard of them yet doesn’t mean they won’t have something great to offer you as a customer,» she points out.

Increase your deductible: If you’re willing to take on a little more of the risk yourself, you can consider increasing your deductible. (This means you’ll pay less for your premium each month, but owe more in the event of an accident.) For example, according to Insurance Information Institute, increasing your deductible by $200-$500 can reduce your monthly premium costs by 15%-30%. Just make sure you’re prepared for an accident and have enough to cover the repair in an emergency fund or other savings account.

Keep driving clean: Experts agree…the biggest thing you can do to get the best auto insurance rate is to keep a clean driving record. «Tickets and accidents will have a negative impact on your out-of-pocket costs as well as your insurance costs,» explains Smolan.

The bottom row

If you are unable to lower your car insurance, there are other steps you can take to lower your overall vehicle costs. Namely maintaining your trip by doing the following:

  • Change your oil regularly (look out for the little sticker on the window!)
  • Check tire pressure periodically
  • Make sure you have the right tires for the weather (eg snow tires in winter climates)
  • Check fluid levels, lights and brakes regularly to make sure nothing is running low and there are no safety concerns

Taking these small steps should prevent major repairs down the road and ultimately make you a safer driver, which will have a positive impact on your auto insurance rates. «If you do all the little things, hopefully you can reduce the burden,» says Smolan. «The best way to keep your rates low is to be a safe driver.»

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