With the cost of inflation, a lot of people are feeling the pinch and trying to save money. One way consumers can cut costs, according to experts, is by checking the rates on their auto insurance policies.
“After a few years of holding steady, auto insurance premiums are rising. They’re expected to rise by as much 20% or more over the next few years,” said Kevin Brasler, executive editor of Washington Consumers’ Checkbook. “One of the reasons for that is, during the pandemic, there weren’t as many claims. Now, there are more claims.”
Brasler said oftentimes drivers stick with the same auto insurance company year after year.
“One of the reasons consumers do that is they think, ‘well, I’m probably getting the current insurer because I’ve been with them a long time and I see this loyalty discount in my policy,'” he said.
But that could be a costly mistake. Brasler recommends shopping around because insurance companies are pretty competitive.
“Most of us could save $500 or more per year. Most of us could save $1,000 or more per year, just by switching coverage to a lower cost company,” Brasler said. “Even if you’ve prepaid a certain amount for your old policy that company has to refund any money you’ve put in.”
While it may be a hassle to contact various insurance companies and agents, Brasler said most will have quotes right on their websites.
Washington Consumers’ Checkbook compared prices charged by insurers operating in the Washington area for seven illustrative policyholders and found that most area drivers can save hundreds of dollars every year by making better auto insurance choices — many will save more than $1,500. For example, Brasler said:
- One of our illustrative couples, with two cars living in Montgomery County and with clean driving records, would pay $900 per year with Progressive, $1,100 with GEICO, or $1,193 with NJM, compared to $2,560 per year with Farmers.
- If that couple lives in Arlington or Alexandria, their annual premium would be $590 with Progressive, $1,110 with The Hartford, $1,111 with AAA, or $1,134 with Amica, compared to more than $2,400 with Farmers and National General.
- If they moved to D.C. and added a teenager to their policy (gulp!), they’d pay $1,380 per year with Progressive or $1,534 with GEICO, but more than $3,200 with Amica, The Hartford, or Liberty, and nearly $5,000 per year with Allstate.
According to Brasler, you don’t have to forsake good service for a better rate; Consumers’ Checkbook ratings revealed that some highly rated companies offer low rates.
Consumers’ Checkbook found that small differences in policyholder characteristics, many of which have nothing to do with driving records, can have big effects on some companies’ premiums.
As far as what coverage you should be paying for, Consumers’ Checkbook has advice on that, too:
- Maintain the highest deductible amount you’re comfortable with
- Be vigilant that your coverage doesn’t lapse, so your rates don’t go up
- Consider dropping collision and comprehensive coverage when your car’s value drops below $5,000
- Find out how much more it will cost to raise limits beyond standard coverages as it’s usually inexpensive to increase limits for liability coverage above standard amounts.
- Carefully consider the extras. Some optional coverages aren’t worth much, but companies charge a lot for them.
- For repairs, insist on using a top shop.
