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How Can I Reduce My Auto Insurance Rates?

By July 28, 2022No Comments

Most of our conversations with our current clients revolve around their rate increases. If you have not noticed by now, insurance carriers are raising their rates. And not just a few dollars either. There are several carriers that have stressed that they foresee a double-digit increase in the next few years.

But why? You probably feel a little cheated.  You have a clean driving record. Maybe you work from home and really don’t go anywhere.  Why should your rates go up? There are a few reasons why.

Inflation. Yes, inflation even affects auto insurance rates because the cost to repair vehicles is increasing. Couple that with supply chain and labor issues, it is becoming very expensive to repair cars.  And let’s not forget, most of the newer models have sensors and cameras so the cost to fix them is also much higher.

Severity. This means that the amount of money being paid out in claims is escalating and that is due to the severity of the accidents that are happening on the road. People didn’t go anywhere for a few years but that is now shifting back to “normal.”  Unfortunately, people either forgot how to drive or they are just living on the edge. The accidents are becoming more severe in nature since the pandemic.

Your auto rates are unfortunately tied to everyone else on the road.

But what can you do to minimize the cost of your auto insurance? There are several options.

  1. Bundle – if you have a homeowners or renters policy, and that carrier doesn’t insure your car, look to bundle it all with the same carrier. It could save you a significant amount of money.
  2. Coverage – I am not a proponent of reducing coverage typically. But sometimes it might make sense for you. Maybe you have several cars in the house so rental car coverage isn’t necessary. Maybe you already have AAA so why do you need roadside service? 
  3. Shop it – yes, it might be time to look around. That is the value of an independent agent. One phone call or text from you, and your agent is off and running, check rates against their other carriers.
  4. Affinity discounts – many carriers offer discounts for veterans, law enforcement, or teachers. Check with your agent to make sure that it is applied if you qualify.
  5. Low mileage – if you are destined to work at home for the foreseeable future then make sure your agent is rating you correctly. Lower mileage or personal use could save you some money as well.
  6. Mileage carriers – there are several carriers now that will rate your insurance by usage or mileage only. Mile Auto and Elephant are a few out there.  Ask us about these carriers today.
  7. Good student discount – this is available to your kids even if they are in college so make sure you are getting this discount and if your kids do not qualify, it is time to hit the books!
  8. Telematics – this is the provocative part of the blog. Agreeing to use a carrier’s telematics app allows the insurance carrier to track your driving habits. You would download an app to your phone. In many cases, the carrier would give you an up-front discount (5-10%) and would then offer more after 30 – 90 days of data. Some are giving added discounts of 10 to 20%. There is great reservation in our society of being tracked like this and I see both sides of it.  But I feel that in the next 10 to 15 years, you won’t have a choice.  It will take just one national brand to do this and everyone else will jump on board.

Now that we are officially in a recession, things seem bleak, and most households are looking for ways to cut back.  You can’t go without auto insurance – it’s a must-have if you are driving.  But there are ways to potentially alleviate those rate increases that are here to stay.  You can call us any time at 513-444-2100 to discuss your current situation.

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