How to Rein In Rising Auto Insurance Rates
Even as inflation has eased, car insurance rates are rising by double digits. But drivers have some options for reining in premiums.
According to the Bureau of Labor Statistics, auto insurance costs were 19.5 percent higher in June than a year earlier. Insurers blame the higher cost of automobiles, parts and repairs, as well as more accidents because of lingering bad driving habits that spread during the depths of the pandemic. They have also cited increased losses from severe weather, including hail storms.
Most drivers already know about discounts available for “bundling” auto and homeowner insurance policies with the same carrier or for insuring multiple cars. But other tactics can help as well.
Becoming a better driver may help. Just one accident can mean you’re paying an average of 43 percent more than drivers with clean safety records, according to the financial website Bankrate, which analyzed insurance data from Quadrant Information Services. The average annual premium for a driver with full-insurance coverage and a pristine driving history is just over $2,300, the analysis found, while the average for a driver with one at-fault accident is about $3,300.
Cultivating safe habits behind the wheel — like setting your phone to “do not disturb” to avoid distraction, and keeping a safe distance from the car in front of you — can help avoid accidents, said Ryan Pietzsch, a driver safety expert with the National Safety Council, a nonprofit focused on reducing preventable injuries and death. He suggested following the “three second” rule: Note the car ahead of you as it passes a fixed object, like a sign along the road. Then, start counting slowly from one to three (say, “one, one thousand; two, one thousand; three, one thousand”). If your car passes the sign before you reach three, you’re too close.
Taking a safe driver course may save you 10 percent on your auto premium, said Benjamin Preston, an auto writer at Consumer Reports. Check with your agent to see if it’s an option in your state. Some courses charge a fee.
