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Feeling the Insurance Heat

What to do about rising auto insurance costs

Auto insurance prices have skyrocketed over the past year. The average cost of auto insurance premiums is now $240 higher than last year, up to an average of $2,014 a year. A recent study found that 11 percent of Americans pay more for car insurance than car payments. Here’s why insurance rates are rising and what to do about it.

Auto Insurance Factors

What you pay for auto insurance depends on a few factors. Some are personal to you, such as your age, the type of vehicle you have, and where you live. Some factors have nothing to do with you. For example:

  • Vehicle prices. The cost of vehicle parts has increased due to inflation.

  • Accidents. The number of serious accidents has increased by 17 percent compared to last year.

  • Claims. The number of insurance claims is also on the rise, likely due to the increase in accidents.

How to Save on Auto Insurance

If your auto insurance premiums are too high, you can try one of these methods to reduce your costs:

  • Move on. Look into getting a new auto insurance policy. Get quotes from at least three companies. Go with the policy that fits your driving habits and your budget.

  • Tie it Together. You can sometimes save some cash by bundling your auto insurance with other types of policies offered by the same company.

  • Call Them. You can often find a discount simply by calling your provider. Insurance companies give out discounts for all sorts of things, from good grades to auto-paying your premiums.

Written by Chris O’Shea,