Car insurance rates are often unfair, and systematically gamed to cost many owners more than they should really pay. Here’s how you can make your insurance premiums as low as possible and still get the coverage you need.
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The Sate of Insurance Premiums Today
Consumer Reports recently stated that insurance premiums began rising in 2021 and that this year’s increase will be the largest in 6 years. In fact, they also stated that since 2017 the average annual premiums have increased 16.5 percent with full coverage costing car owners an average of $1,780 per year.
“According to ValuePenguin, increased commuting and leisure travel have helped inflate premiums, as have rising repair costs. Plus, extreme weather caused by climate change is increasing the risk of damage to cars and other property, especially on the U.S. coasts,” said CR analysts.
Unfair Insurance Practices
However, in their recent Consumer Reports newsletter, analysts also point out that many car owners are paying more than they should all because insurers have found ways to game the system to justify the rates they charge.
For example, you can expect to pay more than other drivers based on:
• Your education level---not just high school, but likely some college levels as well.
• Your job title---entry level positions especially.
• Your credit score---which can be low even if you do not have debt.
• The state you live in---"California and Washington, premiums are rising less than 2 percent on average since last year. But in Arizona, Illinois, and Pennsylvania, they are jumping more than 14 percent on average,” says Consumer Reports.
• The type of car you drive and its age---owners of larger cars like pickups and SUVs as well as luxury cars cost the most to insure.
In other words, factors that have nothing to do with your driving record.
Speaking of which, depending on where you live you will find that states do not follow standardized penalties for traffic violations: “In California…getting a speeding ticket causes a 50 percent jump in premiums, on average, and an at-fault crash doubles premiums. A DUI can cause an even bigger swing: In Hawaii and North Carolina, average premiums shoot up by more than three times for drivers with a DUI,” warns Consumer Reports.
How to Keep Insurance Costs Down
Fortunately, there are steps you can take to help keep your insurance costs down. Below is a summary of recommendations CR analysts listed that will help you pay less than the guy next door:
1. Shop strategically---Sticking with the same insurer you’ve has for years is often a mistake---Contact direct-writer insurers such as Amica and USAA, that offers competitive pricing and see how it compares to what an independent agent can offer through a different insurance company.
2. Choose a top-rated insurer---Don’t base your insurer just on being the cheapest one you can find. Look for those with a good history by car owners who use ones that provide fair and fast claims settlements and good customer service. Consumer Reports is a good resource to finding out how car insurance ratings.
3. Drive carefully---In short, avoid ALL driving violations.
4. Don’t skimp on essential coverage---“Make sure you carry enough liability coverage, which pays for bodily injury and property damage that you may cause to someone else in a crash…depending on your state, a portion of your wages could be garnished in a judgment against you,” warns CR analysts.
5. Look for cost-cutting options such as:
• Choosing a higher comprehensive and collision deductible over a lower one when it comes to a newer model.
• If your car is older, think about canceling your collision and comprehensive altogether, because you could end up paying more than you would get back in repair or replacement costs.
• Consider agreeing to insurers’ telematics programs that promise discounts for safe drivers who agree to install an app or a device that tracks their driving.
6. Downsize your vehicle---A smaller car such as a crossover over an SUV costs about $500 less every year to insure.
7. Drive less---Insurers charge higher rates to drivers who spend more time on the road.
And finally…
For more information detailing car insurance options for car owners, consider becoming a Consumer Reports member and discover how that being a member can save you a lot of money for a small subscription investment.
For additional articles related to car insurance, here are a few for your consideration:
• The Biggest Mistake Consumers Make After Finding a Car Insurer They Trust
• If Your Car Is Damaged in a Storm, Do This Not That When It Comes to Floods
Timothy Boyer is a Torque News automotive reporter based in Cincinnati. Experienced with early car restorations, he regularly restores older vehicles with engine modifications for improved performance. Follow Tim on Twitter at @TimBoyerWrites for daily new and used vehicle news.
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