No accidents. No moving violations. No significant changes to your life or driving behaviors. But, when you open your auto insurance renewal this year, you discover your insurance premium increased.
How can this be?
Sadly, auto insurance rates have increased at more than twice the rate of inflation recently, so you’re not alone if you’ve witnessed the bump. Premium increases are affecting drivers across the country for a variety of reasons:
- The cost of repairing a vehicle is more expensive. With newer cars having more advanced technology, the bill to replace these computerized features is higher.
- Intense weather, including hurricanes, tornadoes and storms, raises rates as a result of an increased number of vehicle damage claims.
- More accidents on the roads by the population at large. The National Safety Council estimated that 40,100 people were killed in 2017 accidents, up about 6% from 2015.
Still, if you’ve done everything right, it feels unfair to see your auto insurance premiums rise. Do you have any recourse? Is there hope to lower those rates?
Obviously, avoiding moving violations and accidents over time is still the best way to reduce insurance costs, but if you’re seeking an immediate drop, here are a few actions you can take.
Negotiate. Jump on the phone. Give your existing company an opportunity to review your overall policy and make suggestions. They might be able to offer professional discounts, multi-policy options and even advise you on how rates will go up if you’re considering a new vehicle purchase in the future. If you’ve been a long-time customer, the company likely wants to keep you. It never hurts to make the call and ask for what you want.
Shop around. Consider seeking the advice from an independent insurance agent who has visibility to multiple insurance brands. They may be able to advise you on a company better able to support your driving patterns, or suggest ways to bundle different insurance products (auto, home, renters, etc.) to score a better discount.
Select a higher deductible. It’s tempting to choose the lowest deductible as possible, but you’ll pay more for that $250 or $500 option. If you have a great driving record and haven’t been in an accident for years, consider a $1,000 deductible. Your rate will immediately go down.
Enroll in your insurance company’s telematics program. A small device is dropped into your vehicle to track your driving behaviors, and this can also function as an anti-theft device too. By letting the insurance company capture these details, you can sometimes lower your premiums by up to 30%.
Bottom line is there are many internal and external factors that influence insurance premiums. Work with an agent to understand your specific needs and driving patterns to ensure you get the best deal, and revisit your insurance needs every year.