Car insurance rates going up, ways to save
TULSA, Okla. — There’s no doubt the price of gas is a huge factor in the cost of owning a vehicle these days.
But as the 2 News Oklahoma Problem Solvers found out, another cost is becoming another factor for families to consider, cost increases an average of nearly 14{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9}.
Just like everything else, inflation is driving up the price of driving.
“Eggs are $10 a carton so I mean everything else is going to be insane,” Randy Holman halfway jokes.
Even the insurance for his car is costing more and more. 2 News caught up to Holman as he was heading to the tag office to drop off some cash for another vehicle expense.
“It seems like every corporation is trying to raise prices so I don’t see why insurance wouldn’t do the same.”
And the increasing cost for insurance causes some folks to make tough decisions. Heather told us, “When I got the notice my insurance premium was going up a couple hundred dollars, it caught me off guard. I wasn’t expecting it. Now my family will have to cut back at the grocery store.”
Insurance analysts tell us inflation is impacting insurance.
According to a recent report by Insurify the national average cost rose 9{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} in 2022, and is projected to rise another 7{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} in 2023. Bankrate.com says nationally, the average cost of full coverage is $2,014 a year, which is 2.93{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} of the average household income. But inflation isn’t the only thing impacting prices.
“Drivers are getting into more traffic accidents, and those accidents are getting more expensive to remediate,” says Chase Gardner, a data analyst for Insurify.
Gardner says the cost of repair parts, labor shortages, and supply chain disruptions are making claims more expensive for insurance companies to pay out.
“Even if you got in the same accident as you did two years ago, it costs 15{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} more to repair now.”
To offset those increases, companies are raising rates costing you more for getting behind the wheel.
“Legally, you have to have it, so there’s nothing I can do about it,” Randy Holman says.
Or is there?
Experts says you can save hundreds by shopping around at least once a year for insurance, before your policy renews. One recent online comparison showed a difference of as much as $600 from one random company to another, for the same coverage.
You may want to consider raising your deductible to lower costs. And take advantage of discounts… safety features already in your vehicle may apply… and bundling with other types of insurance can help, too. Especially if those predictions of total increases of around 15{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} become reality.
“Oh geez, I hope not,” Randy says about those expected increases.
As for Randy, he’ll be on the hunt for lower insurance prices, as inflation takes its toll on driving.
Here are ten tips on saving on auto insurance from Consumer Reports
Car insurance is one of the costliest purchases that consumers hope to never use. While it’s always important to buy the right coverage, it costs a lot more to insure a brand-new car than a five-, seven-, or nine-year-old model you are replacing. Here are 10 helpful tips on how to keep your premiums in line without taking on unnecessary risks.
Do an annual rate check
If you’ve been with the same insurer a long time, it might be tough to beat its rates, especially if you haven’t had any claims lately. In fact, a 2014 survey by the Consumer Reports National Research Center found that only 10 percent of 19,000 ConsumerReports.org subscribers who compared premiums found that they would save money by switching insurers.
It’s easy to compare multiple insurers online, at sites such as Answer Financial, Insure.com, Insweb.com, and NetQuote. You usually won’t get an immediate quote online, but you will get email messages from agents looking for your business. Consider forming a relationship with an independent agent, who will check rates for you at a range of carriers.
Pick a Top-Rated Insurer
Saving money isn’t simply a matter of finding the lowest premium. Some insurers have lower premiums, but end up costing you more in the end by lowballing loss estimates, hassling the repair shop to cut corners, and forcing you to pay extra for original-equipment replacement parts. They might even unfairly jack up your premiums after an accident.
We surveyed 64,872 ConsumerReports.org subscribers who filed a claim between 2011 and 2014. Eighty-eight percent of them were highly satisfied with the handling of their claims. Among the highest-rated groups were USAA, Amica, and NJM, with overall satisfaction scores of 90 or higher.
Set the Right Deductible
A higher deductible reduces your premium because you pay more out of pocket if you have a claim. Hiking your deductible from $200 to $500 can cut your premium on collision by 15 to 30 percent. Go to $1,000 and you could save 40 percent. If you have a good driving record and haven’t had an at-fault accident in years, if ever, opting for a higher deductible on collision might be a good bet. Just make sure you can afford to pay that cost if your luck runs out.
Review All of Your Coverage
Your liability coverage pays for bodily injury and property damage that you cause in accidents. Don’t get caught short by reducing your liability limits to the state minimums. Buying more coverage might seem like an odd way to save, but the benefit comes if you have a costly claim, which can put your life’s savings at risk.
If you have another car that you can use while your vehicle is being repaired, you don’t need to pay for rental-reimbursement coverage. Dump roadside assistance if you have an auto-club membership that’s a better deal, or if it’s part of your new car’s warranty.
Think carefully about personal-injury protection and medical-payments coverage: Forget it if you have good health coverage; keep it if you don’t or if your usual passengers might not be well insured.
Take Advantage of Discounts
Car insurers offer a whole range of modest but worthwhile discounts that are essentially based on a low-risk lifestyle. Here are some to ask your insurer about if they don’t mention them to you first:
- Students with good grades.
- New drivers who have taken a driver-training course.
- Older drivers who have taken a refresher course.
- Any driver who takes a defensive-driving course.
- Members of affinity groups, such as college alumni and certain occupations and professions.
- Anti-theft and safety equipment.
- Multiple-Policy Holders
- Insurers also offer fairly hefty auto discounts if you also buy your homeowners, renters, or life-insurance policy from them. But be sure you check out total costs both ways: premiums from different insurers compared with single-insurer packages.
- Manage Teenage-Driver Risk
- Adding a teenager to your policy can hike your costs by 50 to 100 percent. Make sure your child takes a safe-driving course before getting a license. Make it a rule that unsafe driving will mean loss of driving privileges.
- Inform your insurer if the child isn’t licensed, or if your child is a college student residing more than 100 miles from your home and doesn’t have a car.
- Maintain a Good Credit Score
- Most states allow insurance companies to use your credit score as a factor in setting your premiums. Ask your insurance company if it does that. But regularly check and correct credit reporting errors anyhow. If your finances have been adversely affected by the recession, military deployment, divorce, job loss, death of a family member, or medical problems, ask your insurer for an exception.
Report Reduced Mileage
A major cost component in auto insurance is miles driven per year. The average is about 12,000. But if you’re driving a lot less than usual for some reason, like a job change or retirement, let your insurer know. Your reduced driving could cut 5 to 10 percent off your premiums.
Choose Your Car Shrewdly
Vehicle damage is the biggest cost component for auto insurers, so premiums will vary by auto model. When comparing models, ask your insurer for premium quotes on the different models under consideration.
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