Having a car is not for everyone. Vehicle prices are becoming more and more unaffordable but… what about insurance? Have you ever stopped to think how much we spend on our car insurance? Well yes, if you haven’t noticed, we’ll tell you now: car insurance costs at least 20% more since 2020.
More frequent accidents, more expensive parts, more high-tech vehicles and, of course, inflation. The insurance market is getting increasingly costly and harder to understand. And although many drivers don’t know it yet, some are overpaying simply because they haven’t updated their policy in years.
This is no longer just coincidence or a temporary spike. What’s behind this price hike? And more importantly, why are we keeping quiet about it?
Why has car insurance increased so much?
According to CheapInsurance.com, the rate hike is not just due to the overall rise in living costs or inflation. Other reasons include an increase in road accidents, labour shortages at many repair shops, the price of replacement parts, the advanced technology in modern cars, and even the rise in thefts, all of which have become tipping points for many insurance companies.
On top of all that, policies now include broader coverage (like protection against natural disasters or driver behaviour tracking), and of course, all of that comes at a cost.
Which states have the most expensive insurance?
Louisiana and New York top the list. The average annual cost of full coverage insurance has exceeded $2,000. Louisiana leads, followed closely by New York. The reason is simple: urban traffic.
It depends on income…
Of course, like everything else, it’s harder to pay for those families with lower income. They’ve started shopping around for new quotes to try to save some money on their monthly expenses.
Since when is this happening?
Mainly since the pandemic. Before, many drivers reviewed their policies every three or four years, but since then, the cycle has shortened to less than six months. The goal is to find better deals at more competitive prices that don’t weigh so heavily on low-income households.
But hey, this isn’t bad at all, by comparing prices and choosing what you consider the best option, you could save a good amount of money too.
How can I pay less?
Many drivers are overpaying just out of habit. They haven’t checked their policy quote in over a year and haven’t explored cheaper options, so here are a few tips:
- Review and adjust your coverage level if your car has lost value
- Check if you qualify for good driver or low mileage discounts
- Consider raising your deductible to lower your monthly premium
- Use comparison tools like CheapInsurance to find better deals
Ok, but, tell me how I can choose the best insurance for my car
Don’t let yourself be guided by a neighbour or a coworker, think about what you actually need. Maybe you’re paying for raccoon coverage when raccoons don’t even exist in your state. So the first thing is to figure out what your vehicle really needs.
Make sure the policy you choose fits your income and monthly budget without compromising other basic needs. This will also depend on your state (and the accident rate in it).
Lastly, be realistic, if you haven’t been a good driver, your insurance will likely cost more. But if you have a clean record, you might get some discounts. It’s all about looking!
A simple process could save you a good chunk of your monthly expenses, so don’t get used to being a passive insurance consumer, it could cost you dearly! Review when you can and when you feel it’s necessary, because there are always more options, and above all, choose the one that best fits what you actually need. Inflation already hits hard enough without giving away extra money for no reason! Get informed and save, it’s essential now!