Car insurance premiums have been on the rise, increasing by 19.5% between June 2023 and June 2024, according to the Department of Labor’s July 2024 Consumer Price Index. This surge in premiums can be attributed to various factors, including inflation, the rising cost of repairs, an increase in severe weather events, and a rise in the number and severity of accidents. While these factors may seem daunting, there are ways to mitigate the impact on your wallet and still get the best price on car insurance.
One effective way to save on car insurance is by shopping around for the right policy. Different insurance companies offer varying rates and discounts, so it’s essential to compare options to find the best deal. For example, Auto-Owners Insurance offers reduced rates for policyholders who pay their annual premium upfront and on time at the time of renewal. By taking advantage of such discounts, you can lower your overall insurance costs.
Another strategy to save on car insurance is by bundling your home and auto policies. Many insurance providers offer discounts for customers who purchase multiple policies from them. For instance, Amica Auto Insurance provides bundling discounts of up to 30% for combining home and auto insurance. By bundling your policies, you can enjoy significant savings on your premiums.
In addition to bundling, insurance companies offer various discounts for safe drivers, students, homeowners, military members, and more. State Farm, for example, offers a discount of up to 30% for good drivers who use its Drive Safe & Save mobile app to track their driving habits. Similarly, Geico provides discounts for students and young drivers, making it easier for policyholders to save on their insurance costs.
For those who drive infrequently, a pay-per-mile insurance policy could be a cost-effective option. Programs like Nationwide’s SmartMiles offer affordable coverage based on the number of miles driven, allowing low-mileage drivers to save over traditional insurance plans. By opting for a pay-per-mile policy, you can potentially save more than 40% on your insurance premiums.
Improving your credit score can also help lower your car insurance costs in many states. Experian Boost™ is a free service that reports consistent payments, such as rent and phone bills, to credit reporting agencies, potentially boosting your credit score. By maintaining a good credit history, you may qualify for lower insurance rates and save money on your premiums.
Lastly, consider asking for a higher deductible on your insurance policy. By increasing your deductible amount, you can lower your premium costs. The Insurance Information Institute suggests that raising your deductible from $200 to $500 could reduce collision and comprehensive coverage costs by 15% to 30%, while increasing it to $1,000 could save you 40% or more. However, it’s essential to ensure that you have enough funds to cover the deductible in case of an accident.
In conclusion, while car insurance premiums are on the rise, there are several strategies you can employ to save money on your policy. By shopping around for the right coverage, bundling your policies, taking advantage of discounts, considering pay-per-mile insurance, improving your credit score, and adjusting your deductible, you can effectively reduce your insurance costs and find the best price on car insurance. Remember to explore all available options and compare quotes to secure the most affordable and comprehensive coverage for your needs.