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Inflation, rising interest rates and a complete storm of volatile gas prices will leave many American drivers cash-strapped in 2022, with higher car insurance premiums only deepening the financial burden.
Nearly half (47%) of American drivers feel the cost of auto insurance will rise in 2022, according to a recent survey by insurance comparison site Insurify. For some drivers, it wasn’t a creep, it was a giant leap. In his three states of Oregon, Maryland, and Virginia, drivers had their insurance premiums increased by 25% of his.
Drivers in Utah, South Dakota, Minnesota, Wisconsin, Ohio, and Tennessee are experiencing price increases of 20-25% on average, and are a little out of luck. Experts predict that insurers across the country are not ready to put the brakes on further price hikes.
The good news is that even if inflation continues to push interest rates higher, there are ways to mitigate the impact on your monthly budget.
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Amount to be paid in 2023
Insurify researched over 69 million auto insurance quotes and found that the average annual cost of auto insurance in the US will increase 9% to $1,777 in 2022.
“There are two main ‘drivers’ to the spike in premium rates,” says Dan Lokert, a professor of finance at the University of San Diego School of Business. “Consumers are driving more and vehicle repair costs are higher than ever.” Insurify report. “Until we fix the inflation problem, it’s hard to see how this will change.”
The company expects the average annual auto premium rate to rise another 7% this year to $1,895.
Betsy Stella, Vice President of Insurance Partnerships at Insurify, said: 2022 report.
If skyrocketing auto insurance prices have already kicked you into gear, here are five ways to keep your premiums down.
Do some research and compare coverage
You can pay to shop. If you’re nearing policy renewal and your costs have skyrocketed, you should consider getting at least three quotes from other insurers.
Drivers can shop online and find the best deals in your area with the help of your local insurance agent.
Be careful not to cut corners on coverage that will cost you substantially more if you have to make a claim.
Getting a car appraisal to understand the value of your car and how much it will cost to repair or replace is important when considering the extent of insurance you need to purchase.
If your car is old and worth less than 10 times the premium, the Insurance Information Institute suggests skipping collision insurance or blanket coverage 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 offense on your driving record can increase your auto insurance price by an average of 34%. If you have a serious record violation, like a DUI, you may have to pay her twice as much as someone with a clean driving record.
Many insurance companies offer discounts if you have a clean claim or breach history and do not pose a significant risk to others on the road. If you’ve been in an accident in the past, you can regain your insurance company’s trust (and chances of a discount) by attending a certified vehicle safety or defensive driving course.
read more: Baby Boomer Reflections: Here are the top five “big money” purchases you’ll (probably) regret in retirement, and how to offset them.
Larger deductible budget
When you buy car insurance, you pay a deductible, an amount you have to pay out of your own pocket before the insurance company pays the costs associated with your claim.
Increasing your deductible can significantly reduce your monthly bill. However, this means that you must have enough cash on hand to pay the full deductible if you need to file a claim.
Consider pay-as-you-go options
Usage-based or pay-as-you-go insurance pays for what you actually do, not what the insurer thinks you will do.
As part of the process for this type of coverage, insurers have plug-in devices or mobile apps that they use to monitor driving habits such as frequency and distance driven, typical driving time, and how they drive. can. Please drive safely.
If the data you collect works to your advantage (for example, if you take frequent short trips and always follow the speed limit), you can get discounts from your insurance company.
But it works both ways. If you regularly drive long distances and hit the brakes, you may be penalized by your insurance company.
Research all the ways you can save money
There are many discounts available for drivers to lower the cost of car insurance.
Special pricing is often available for longtime and loyal customers, such as those who insure multiple drivers or vehicles, or who combine (or bundle) home and auto insurance with the same insurer .
Certain groups, such as students with good grades, active duty military, retirees, or reservists, are also eligible for discounts from many insurance companies, although eligibility rules vary from company to company.
Buying your insurance policy online or using a payment method recommended by your insurance company (such as a lump sum payment) can also save you money.
Insurance companies want to understand your payment history and money management skills. Having a good credit score shows that you’re a risk-averse individual and can help keep your car insurance costs down.
You can also invest in advanced safety and anti-theft features like car alarms and LoJacks. This can reduce insurance costs in the long run.
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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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