7 Ideas to Tackle Rising Auto Insurance Premiums

Service members show off their hobby cars in a parking lot
Joint Base McGuire-Dix-Lakehurst community members look at cars displayed during a ceremony marking the reopening of the Auto Hobby Shop on Joint Base MDL, New Jersey, Nov. 7, 2018. Cars were showcased to show the many features the shop has to offer. (Airman 1st Class Ariel Owings/Air Force)

The insurance business has been hit hard as result of rapid inflation, supply chain issues, rising repair costs and several adverse weather events. The result: billions of dollars of losses.

As insurers scramble to catch up, you may be paying a lot more for your coverage and looking for ways to lower your rates. If so, here are few strategies to explore:

1. Update Discounts

Defensive driving and good student discounts are just two of the many ways you may be able to save. Many carriers offer behavior- and usage-based insurance plans in which rates are based on how much and how safely you drive. These are great options for safe drivers and those working from home some or all of the time.

2. Increase Deductibles

The higher the deductible you choose, the lower the premium. But remember: The deductible is what you must pay if something goes amiss. Make sure you have at least that amount in savings if using this strategy.

3. Drop Coverage

Lenders typically require comprehensive and collision coverage, but if you own an older vehicle outright, you may be able to save by dropping this coverage (not your liability coverage, which is required). One caution: This could leave you in a bind if your car is seriously damaged or totaled, whether in an accident or by severe weather. Again, make sure the liability coverage (bodily injury, property damage, etc.) that your auto policy provides is aligned to protect your financial assets. This is an area where you don’t want to come up short.

4. Save with Multiple Products

Insurance is a business, and insurers want yours. That’s why many provide savings or discounts for additional products or lines of coverage. More coverage in one place could mean savings.

5. Manage Credit Responsibly

In some states, insurance companies use credit-based insurance scores to forecast claims, and that can affect your rates. So one of the many reasons to maintain good credit could be a potentially lower insurance bill.

6. Pay Automatically

Set up an automatic draft from a checking account or a recurring payment, and you could save a few dollars. A bonus: You won’t be charged with a late penalty for forgetting to pay.

7. Drive Safely

A good driving record, of course, helps with auto insurance rates. Drive the speed limit, save the eating for the dinner table, finish your makeup before leaving home, and remember that texting and phone calls can wait.

There are a lot of potential ways to cut costs. Do it in a way that doesn’t put you in financial jeopardy.

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