You’re not alone if you’ve noticed that your car insurance bill is higher than last year. Inflation affects everything we purchase, and this includes car insurance premiums.
So how can you find affordable car insurance? What’s the best way to get lower rates? How can you do anything about it right now? You’re about to find out.
Factors Affecting Insurance Premium Increases
New Cars Cost More
Newer cars have more safety and security features, like onboard computer interfaces, making them less likely to be involved in crashes and accidents. However, these same features mean that newer cars cost more to repair if there’s an accident.
Cars Cost More to Repair
The cost of new cars isn’t the only problem; the cost of repairing cars has increased. In addition, the cost of parts and labor has increased, regardless of whether they are OEM or aftermarket parts.
Car Crashes are More Frequent and Severe
Roads and highways have more cars than ever before. Multiplying that with the number of people distracted by phones or other electronics creates a recipe for more frequent and more fatal car crashes.
More Comprehensive Claims
Comprehensive insurance pays to repair or replace your car for non-collision events like:
- Accidents with animals
- Glass and windshield damage
- Weather or other acts of nature
Theft in particular has significantly increased, specifically catalytic converter parts, which costs between $1,000 and $3,000 to replace.
Supply Chain Setbacks
Supply chain snags are another common reason you might see your car insurance rate increase. This happens when there’s a problem with the parts or cars in the supply chain, and they can’t be delivered to manufacturers in time, causing delays and shortages that increase costs across the board.
How to Defend Against Rising Car Insurance Rates
Reevaluate Deductibles with Your Agent
Every car insurance policy has a deductible–the amount of money you have to pay before an insurance company takes over payment for an accident or other claim.
The higher your lower, the higher your premium (the cost of the policy). However, if you reduce your deductible amount and accept a larger share of financial responsibility, it can save you hundreds.
Your insurance agent can help you evaluate whether this is a wise strategy by discussing your financial position and the amount of risk you’re willing to take.
Consider How Much Coverage You Need
If you bought your car insurance policy a while ago, your needs may have changed since then. For example, your car got older, you don’t drive as much, or you have more savings in the bank.
In this situation, consider changing your car insurance coverage to lower your rates. Do you still need the same coverage? Can you drop extras like towing or rental car reimbursement?
Review Your Vehicle Use
Since the pandemic, more people have begun working from home. Instead of driving their car primarily to commute to and from work, they now use it for pleasure, like going to see friends or family and doing errands like shopping.
If that is similar to your situation, reclassifying your car’s use from commute to pleasure could save you some money.
Shop Around for Lower Insurance Prices
Find lower car insurance rates by comparing rates from several companies. Independent insurance agents use dozens of carriers to help you find the best fit for your needs.
We can help you shop around with other carriers offering better rates than your current policy. Best of all, comparison shopping costs you nothing and there’s no obligation to switch.
Ask About Discounts
Most people don’t realize auto insurance companies offer a multitude of discounts like continuous coverage, good student, veteran, multi-policy, and more. Ask your agent about discounts to save even more money on car insurance.
While it can be frustrating to have car insurance rates go up, the good news is that there are ways to lower them.
You can start by asking your auto insurance agent about discounts and comparing prices with other providers. If you find one of these options isn’t working for you anymore, it might be time for a change.