Car Insurance Premiums Are Up 20% From Last Year. 3 Ways to Keep Yours Manageable

Getting behind the wheel got significantly more expensive throughout 2023, with the average auto insurance premium rising 20.3% last year, according to the Bureau of Labor Statistics. This trend could continue into 2024, as vehicle values continue to rise and repairs become more expensive. More frequent and severe natural disasters are also contributing to the higher costs.

But the rules for finding a good deal on auto insurance haven’t changed. Here are three moves drivers can try this year to find the coverage they want at a reasonable price.

1. Shop around

This is the most important thing drivers can do to find the best deal on insurance. Every insurer evaluates risk differently, which is why they all offer the same person different rates. The only way to figure out which offers the best price to a given driver is to get quotes.

Most of the best auto insurers have online quote tools these days that enable drivers to view their prices and customize their coverage in minutes. But to get an accurate quote, drivers will need important information, including:

  • Their vehicle identification number (VIN)
  • Social Security number
  • The date(s) of any accidents or traffic violations

Many providers enable drivers to save their quotes by entering their email address so they can return to them at a later date. This is often worth it because it enables applicants to easily compare rates from several providers at once. 

It’s tempting to focus on premium costs alone, but there are other factors worth considering. The deductible determines how much the policyholder pays out of pocket when they need to file a claim. And customer service — or lack thereof — can make the claims process a breeze or a nightmare. Weigh all these factors before deciding on the best option.

Read more: check out our picks for the best car insurance companies

2. Watch for discounts

Most car insurers offer a variety of auto insurance discounts to help drivers save. Some, like safe driving discounts, are pretty common. Others, like savings for hybrid or electric vehicles, are rarer. It doesn’t hurt to review a company’s car insurance discount list when deciding which companies to get quotes from. This is especially true for those who qualify for less common discounts. However, it’s important to note that more discounts don’t always translate to a lower premium.

Usage-based discounts are also worth considering for those who are comfortable with the monitoring involved. Drivers who agree to participate will have a small device placed in their vehicle that monitors their driving behavior, or they’ll have to download a mobile phone app. Good driving leads to increased savings, on top of the savings the policyholder gets just for enrolling. 

3. Choose a higher deductible

Raising an auto insurance deductible usually lowers premiums, sometimes significantly. It’s definitely an option worth considering for drivers who hope to save money over the long term. But it’s important to prepare for the worst.

Drivers may want to save for the deductible in an emergency fund so they have enough cash on hand, should they get into an accident. One way to do this is to place whatever they save on premiums by raising their deductible into a savings account each month. For example, if the premium is $350 per month with a low deductible and $300 per month with a high deductible, a driver could save $50 per month until they’ve saved enough to cover their whole deductible.

If all of that doesn’t work, reducing coverage is also an option for many drivers. But it’s important to understand the risks of doing so. Less coverage increases the risk that drivers could owe huge out-of-pocket costs if they cause a serious accident. And forgoing auto insurance altogether is illegal in nearly every state, with punishments ranging from fines to jail time. Give the above tips a shot before reducing coverage to see what kind of a difference they can make.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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