Auto insurance premiums surge: How to save as rates continue to climb
(InvestigateTV) — Auto insurance premiums have soared by 18.6% over the last year, according to a new report by the Consumer Federation of America (CFA).
In nearly every state—except New Hampshire—drivers are required to have auto insurance. Driving without it can lead to serious consequences, including fines, license suspension, or even jail time. However, the cost of staying insured has become its own financial burden.
Michael DeLong, a Research and Advocacy Associate at the Consumer Federation of America, has been studying these increases.
“Some of this has to do with inflation. But in recent months actually, despite the fact that inflation has gone down, auto insurance costs have kept going up,” DeLong explained. “One of the reasons for this is that auto insurance companies use a whole bunch of non-driving related, socioeconomic factors to unfairly charge consumers higher premiums.”
DeLong highlighted factors like education level, occupation, ZIP code, homeownership status, and credit score as contributing to higher premiums.
“Our report actually found that people who have a perfect driving record, but poor credit can wind up paying hundreds or sometimes even over $1,000 more in premiums annually compared to someone who has a perfect driving record and excellent credit,” he said.
Despite the rising costs, there are steps you can take to lower your premiums:
- Shop Around: DeLong suggests comparing quotes from multiple insurance companies. “It could be well worth your time to go online and get a bunch of different quotes to see which one offers you a better deal,” he advises.
- Update Your Insurer on Life Changes: If you’re driving less due to remote work or retirement, notify your insurer. Reduced mileage may qualify you for a lower premium.
- Improve Your Credit Score: Working on your credit can lead to significant savings over time.
- Ask About Discounts: Explore potential savings for being a student, having an anti-theft device, or setting up automatic payments. Many insurers offer discounts based on these factors.
As premiums continue to climb, staying proactive and informed can help keep costs manageable. For more tips on saving, visit ConsumerFederation.org or contact your insurance provider.
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