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A perfect storm of inflation, interest rate hikes and volatile gas prices have left many American drivers strapped for cash in 2022 – and auto insurance price hikes have not. only increase the financial burden.
Nearly half (47%) of U.S. drivers saw their car insurance costs rise in 2022, according to a recent survey from the Insurify insurance comparison website. For some pilots, it was less of a creep and more of a giant leap. In three states – Oregon, Maryland and Virginia – drivers have been slammed with a 25% hike on their insurance bills.
Drivers in Utah, South Dakota, Minnesota, Wisconsin, Ohio and Tennessee fared little better, seeing average price increases of 20-25% – and experts predict that insurance companies are not yet ready to rein in further increases across the country.
The good news is that even if inflation continues to push rates up, there are ways to lessen the impact on your monthly budget.
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How much you will pay in 2023
The average annual cost of auto insurance in the United States jumped 9% to $1,777 in 2022, based on Insurify’s review of more than 69 million auto insurance quotes.
“There are two main ‘drivers’ for skyrocketing insurance rates: consumers are driving more and cars are more expensive than ever to repair,” says Dan Roccato, professor of finance at the University of San Diego School of Business. , in the Assurify report. “It’s hard to see how that will change until we solve our inflation problem.”
The company predicts the average annual auto insurance rate will rise another 7% to $1,895 this year – and the prices may not stop there.
“The general consensus is that it will take eight to 12 months before rate increases start to slow, and some believe it could be several years before prices fully stabilize,” says Betsy Stella, Vice President of Insurance Partnerships at Insurify, as part of the report 2022.
If skyrocketing car insurance prices are already making you cringe, here are five ways to get your insurance expenses under control.
Shop & Compare Coverage
It can pay to shop around. If your policy is about to be renewed and the cost has increased significantly, you should consider get at least three quotes from other insurance companies – in case you can get a lower rate.
Drivers can buy online or get help from a local insurance agent to find the best deals where you live – but remember, cheap doesn’t always mean good when it comes to car insurance.
Make sure you don’t take any shortcuts with coverage that will make you pay a lot more out of pocket when you have to make a claim.
Getting a vehicle appraisal to understand what your car is worth and how much it would cost to repair or replace it is important when considering how much insurance coverage you should purchase.
If your car is old and worth less than 10 times the cost of your insurance, the Insurance Information Institute suggests ditching collision or comprehensive coverages to save money.
Low-risk, high-reward driving behavior
Safe driving protects you, others on the road and your wallet.
According to Insurify, having just one violation on your driving record can increase the price of your car insurance by an average of 34%. If you have a more serious offense on your record, such as a DUI, you may have to pay twice as much as someone with a clean driving record.
Many insurance companies will give you a discount if you have a claim-free or violation-free history and don’t pose a big risk to others on the road. If you’ve had an accident in the past, you can regain your insurer’s trust (and your chance for a discount) by attending an accredited vehicle safety or defensive driving course.
Budget for a larger deductible
When you purchase car insurance, you agree to pay a deductible, which is the amount of money you will have to pay out of pocket before your insurance company pays the expenses associated with a claim.
If you increase your deductible, you can significantly reduce your monthly bill. But that means you’ll need to make sure you have enough money set aside to pay the full excess if you need to file a claim.
Consider a pay-as-you-go option
With usage-based or pay-as-you-go insurance, you pay for the driving you actually do, not for the driving your insurance company thinks you do.
As part of the process for this type of coverage, the insurance company will have a plug-in device or mobile app that you use to monitor your driving habits, including how often and how far you drive, when you usually drive and how safe you drive.
If the data collected works in your favor – for example, you take infrequent short trips and always obey the speed limit – you could qualify for a discount from your insurance company.
But it works both ways. If you regularly drive long distances and hit the brakes hard, your insurance company could penalize you.
Find all the ways to save
There are many discounts that drivers can access to lower the cost of car insurance.
Long-time loyal customers are often rewarded with special rates, as are those who insure more than one driver or car and those who combine (or bundle) their home and auto insurance policies with the same insurance company. ‘insurance.
Certain groups like students with good grades and active, retired, or reserve members of the military can also get discounts from many insurers — but qualification rules vary by company.
Purchasing your insurance policy onlineor using a payment method preferred by insurance companies – such as one-time payment – can also result in savings.
Insurance companies like to understand your payment history and money management skills. Have a good credit score can help keep your auto insurance costs low, as it indicates that you are a risk averse person.
You can also invest in advanced security and anti-theft features such as car alarms and LoJacks, which can reduce insurance costs in the long run.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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