Rising Car Insurance Rates and How to Lower Your Premiums

Rising Car Insurance Rates and How to Lower Your Premiums

February 07, 2024

The insurance landscape has seen significant changes in recent years. Since 2022, car insurance rates have skyrocketed by 43% and they're expected to continue to rise. As an independent insurance agency, John Andrade Insurance is here to help you navigate these changes and ensure you're adequately protected, without breaking the bank.

The Situation

Research from Bankrate shows that car insurance premiums will continue to climb this year. The average cost for full-coverage car insurance in the U.S. was $2,543 per year in January, up 26% from $2,014 in the same month of the previous year. This is a steep increase from the average rate of $1,771 in January 2022.

These price increases are due to insurance companies reassessing their risk models to account for the higher cost of vehicle repairs and an increase in claims due to extreme weather. In addition, drivers with low credit-based insurance scores, a metric that predicts how likely a person is to file a claim, are paying even more: $4,338 per year on average.

Many factors contribute to these increases, including pricier cars and car parts, a shortage of body-shop workers, an increase in accidents, and more severe crashes. Supply-chain problems affecting the cost of cars and replacement parts, along with more advanced technology making cars more expensive to repair, also contribute.

These effects are felt by consumers as well. The monthly expense of owning a car rose to $1,015 in 2023, up more than 13% year over year, according to AAA. This adds up to $12,182 per year, requiring households to earn about $100,000 a year to afford a new car.

The Impact

Rising costs have led to an increase in the number of uninsured drivers. This not only leads to potential legal troubles for these drivers but also puts them at risk of having to cover the other driver’s and any passengers’ losses, including medical expenses, in the event of a crash. This can create a more dangerous environment on the roads.

Lowering Your Premiums

Despite the rising costs, there are ways to lower your insurance premiums:

  1. Use an Independent Insurance Agent: Exploring a variety of insurance carriers can potentially lead to savings by helping you find the most suitable coverage. By employing an independent insurance agent, you gain the advantage of professional guidance while comparing policies from different carriers, ensuring that your coverage meets your needs comprehensively.
    Check your mileage: If you're driving less these days, make sure your insurance company has an accurate estimate of your annual mileage. This could potentially lower your premium
  2. Bundle your insurance: If you own your home, consider bundling your home and car insurance. Many insurers offer discounts for this.
  3. Consider a higher deductible: If you can afford to pay a higher deductible in the event of an accident, this can help lower your premiums.

At John Andrade Insurance, we understand the complexities of the insurance market and are here to help you find the best solutions for your needs. We invite you to contact us at 401-253-6542 or visit our quote page to explore your options.

Sources: Car-insurance rates have soared 43% since 2022 and are expected to continue to climb. Here’s how to lower your premiums.