Car insurance rates are rising, so shop to save

  • Consumers are seeing rate increases of 3% to 12% among different car insurance companies.
  • Shopping around and comparing quotes can save you money on your insurance policy.
  • Don’t overlook discounts based on good driving and vehicle safety – they add up.
  • Read more stories from Personal Finance Insider.

If you have noticed an increase in your

car insurance

bounties recently, you are not alone. Even though they are free of accidents and claims, many consumers are seeing an increase in their insurance premiums.

If you’re frustrated with this extra expense, it might be time to consider switching providers.

Auto insurers are raising their rates

Insurers generally increase their annual rates by 3% each year. However, there were fewer drivers on the road during the pandemic, therefore fewer accidents, so the rates generally remained the same or lower.

Recently, there has been an increase in the number of drivers and road accidents, so insurers are raising their rates to meet the growing volume of claims. Additionally, inflation, high car prices, auto parts and labor shortages all contribute to the cost insurers pay for a claim, says Josh Damico, vice president of insurance operations at the auto insurance comparison site Jerry.

Progressive, Allstate, and GEICO are a few of the insurance companies that have approved interstate rate hike requests. Rate hikes in November 2021 range from 3% to 12% across various companies, according to S&P Global Market Intelligence.

How to lower your car insurance costs

You always have power over your insurance costs. You can always change insurance companies to meet your financial needs.

“70% of people haven’t renewed their auto insurance policy, which means they may be leaving money on the table. If you’re not happy with your current rate, shop around,” says Damico.

To buy the best deals, you can contact insurers or use their quote tool to receive a quote, or you can go through an independent insurance broker or insurance provider to collect quotes from multiple insurers. You can also check out our guide to the best cheap car insurance companies to get the best coverage at an affordable rate.

Additionally, many carriers offer a telematics program to track driving behavior. Companies may consider factors such as the number of miles you travel, the speed at which you brake, the time you are on the road, to determine your risk as a driver. As a consumer, you can save money by switching to smart driving programs and choosing to drive safely, says Ted Olsen, CEO of Goosehead. Insurers also offer discounts based on your lifestyle. You could get additional savings by driving less or by bundling insurance policies.

But whatever you do, avoid reducing your coverage in an effort to save money. You don’t have to give up enough coverage for a lower rate. Olsen says that instead of reducing your coverage, you can switch carriers or take advantage of discounts to lower your costs.

“Even if rates go up on average, consumers can save money by taking advantage of an independent agent’s ability to check the market and get better coverage and protection,” says Olsen.

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Justin D. O'Neill