For the past year or so, it seems like everything in the automotive industry has increased in price. New and used car prices are at an all-time high, the cost of gas is on a steady incline, and even car insurance rates have gone up. If you find that the cost of your car insurance policy has increased recently, here is how you can save money on it.
Here are some ways to reduce the cost of your car insurance
Damaged and destroyed vehicles on the side of a street. | Jonas Walzberg/picture alliance via Getty Images
If you find that your car insurance is too high, or is increasing as the months go on, then there are a few things you can do to cut the cost. Fox 15 reports that the following methods can help you reduce the cost of insurance:
- Reduce the amount of coverage on your policy: Consider reducing the amount of coverage on your insurance policy. If you have add-ons like rental car coverage or roadside assistance, but never use them, then you can take them off the policy to save money. Also, if you own an older car that may not need extra coverage like “comprehensive” and “collision,” then consider removing them, which will lower your monthly payment.
- Increase the deductible: The most common deductible amount for coverages is $500, however, if you increase it to $1,000, then you can save more money every month.
- Consider using a driving tracker: Many insurance companies offer their customers a driving tracker that records their mileage and driving habits. The better you drive the more you save, so this could be a good way to get a discount on your car insurance.
- Improve your credit score: Your credit score can have a positive or negative effect on your car insurance premium. Therefore, it could be advantageous to work on improving your credit score and shopping around for insurance rates to lower your cost.
- Pay your car off: If you are currently financing your car then your lender may require you to have more insurance coverages like comprehensive and collision. But if you’re almost done with the monthly payments, then you could save money by paying off the loan and lower your coverages.
- Shop around: Shopping around for more affordable insurance rates from other companies could equate to more money saved every month.
Why are car insurance rates increasing?
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The semiconductor chip shortage is partly to blame as the decrease in inventories has affected car rentals, which in turn has affected car insurance companies’ costs. As such, many industry sources report that we could see insurance rate hikes of 5 to 6% this year. Additionally, the shortage of employees and the need to pay existing employees a higher rate has affected car insurance companies.
Save money on your car insurance as rates are on the rise
A woman speaking on the phone in front of a flooded car. | Joan Cros/NurPhoto via Getty Images
If you find that your car insurance rates are on the rise, then following the aforementioned steps could save you money. Even if it only equates to $50 saved per month, that’s $600 in annual savings you could realize just by switching insurance companies, reducing your coverage, or raising your deductibles. The best part is, those savings are typically just one phone call away.
Keyword: How to Save Money on the Rising Cost of Car Insurance