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Three states see car insurance prices up 25% in 2022, and experts say US drivers should prepare for even more shocks in 2023 – here are 5 Ways to reduce your costs right now


Three states see car insurance prices up 25% in 2022, and experts say US drivers should prepare for even more shocks in 2023 - here are 5 Ways to reduce your costs right now

Three states see car insurance prices up 25% in 2022, and experts say US drivers should prepare for even more shocks in 2023 – here are 5 Ways to reduce your costs right now

A perfect inflationary storm, rising interest rates, and volatile gas prices leave many American drivers cash-strapped in 2022 — and soaring car insurance prices will only exacerbate the financial burden.

Nearly half (47%) of US drivers see the cost of their auto insurance increase by 2022, according to a report. Recent surveys from insurance comparison website Insurify. For some drivers, it’s not a leap but a leap. In three states – Oregon, Maryland and Virginia – drivers have been criticized with a 25% increase in their insurance bills.

Drivers in Utah, South Dakota, Minnesota, Wisconsin, Ohio and Tennessee fared slightly better, with an average price increase of 20-25% – and experts predict that insurers still not ready to slow down further nationwide.

The good news is that even as inflation continues to drive interest rates up, there are many ways you can lessen the impact on your monthly budget.

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How much will you pay in 2023

The average annual cost of car insurance in the United States has increased 9% to $1,777 in 2022, based on Insurify’s assessment of more than 69 million car insurance quotes.

“There are two main ‘drives’ for the spike in insurance rates: consumers are driving more and the cost of repairs,” said Dan Roccato, a professor of finance at the University of San Diego’s School of Business. Cars are more expensive than ever. in Insurify’s report. “It’s hard to see how this changes until we fix our inflation problem.”

The company predicts the average annual car insurance rate will increase by 7% to $1,895 this year — and prices may not stop there.

Betsy Stella, Vice President of Insurance Partnerships at Insurify, said: “The general consensus is that it will take eight to 12 months before rate hikes start to slow, and some say It may take several years for prices to fully stabilize. the report in 2022.

If the spiraling rise in car insurance prices has been wearing down your gears, here are five ways to limit your insurance costs.

Shop around and compare coverage

It can pay to shop around. If your policy is about to renew and costs have increased significantly, you should consider get at least three citations from other insurers — just in case you can get a lower rate.

Drivers can Online Shopping or get help from a local insurance agent to find the best deals where do you live — but remember, cheap isn’t always a good thing when it comes to car insurance.

Making sure you don’t cut your coverage will cost you significantly more when you need to make a claim.

Having a car appraisal to understand how much your car is worth and how much it will cost to repair or replace it is important when thinking about the level of insurance you need to buy.

If your car is old and worth less than 10 times your insurance cost, insurance information institute suggests collision reduction or comprehensive insurance to save money.

Low-risk, high-reward driving behavior

Safe driving protects you, others on the road, and your wallet.

According to Insurify, just one violation on your driving record can increase your car insurance price by an average of 34%. If you have a more serious offense on your record, such as a DUI, you may be charged twice as much as someone with a clean driving record.

Many insurance companies will give you a discount if you have a history of no claim or no breach and don’t pose a great risk to others down the road. If you’ve taken a risk in the past, you can regain your insurer’s trust (and your chance to get a discount) by taking an accredited defensive or safe driving course.

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Budget for a larger deductible

When you buy car insurance, you’re committing to a deductible, which is the amount you’ll have to pay out of your own before your insurance company pays any claims-related costs.

If you increase your deductible, you can significantly reduce your monthly bill. But this means you’ll need to make sure you have enough cash to pay the deduction in full if you need to file a claim.

Consider the pay-as-you-go option

With usage-based or pay-per-use coverage, you pay for the driving you actually do — not the driving your insurance company thinks you do.

As part of the process for this type of insurance, the insurer will have an add-on device or a mobile app that you will use to track your driving habits including how often and how far you drive, when you usually drive and how you drive safely.

If the data collected is in your favor — for example, you take short, infrequent trips and always adhere to the speed limit — you may be able to receive a discount from your insurance company.

But it works both ways. If you regularly drive long distances and slam on the brakes, your insurance company may fine you.

Research all the ways you can save

Have Many discounted drivers are accessible to reduce the cost of car insurance.

Loyal, long-term customers are often rewarded with special rates, as are those who insure multiple drivers or cars and who combine (or bundle) their home and auto insurance policies with the same insurance company.

Certain groups such as high-achieving students, active service members, retired or reservists can also get discounts from many insurance companies – but the rules of standardization vary from company to company.

Buy your insurance policy onlineor using a payment method preferred by insurance companies — such as a lump sum payment — can also help save money.

Insurance companies want to understand your payment history and money management skills. Only one good credit score can help limit your car insurance costs as it shows that you are a risk-averse individual.

You can also invest in advanced anti-theft and safety features like car alarms and LoJack, which can help reduce insurance costs in the long run.

What to read next?

This article is for information only and should not be construed as advice. It is provided without warranty of any kind.

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