Car insurance costs are on the rise in 2023. According to personal finance website ValuePenguin, insurance rates across the US are expected to rise by 8.4%, bringing the total average premium for full coverage to $1,780 per year.
Pricier cars and more expensive repairs are just two reasons ValuePenguin cites for the possible higher rates. Additionally, workers resuming their daily commutes and an increase in storm-related claims due to climate change will also cause you to pay more for your insurance coverage should these predictions bear out.
If you're a car owner already frustrated by last year's increased prices, don't trade in your vehicle for a bus pass just yet. Here are three ways to make sure you find the best car insurance deal for you.
Bundle your renters or homeowners insurance with your car insurance
If you already have homeowners or renters insurance, you might be able to save on your car insurance by getting your car insurance from the same company.
According to InsuranceQuotes data, the average driver saves about 16% on their insurance premiums by bundling their homeowners insurance with their car insurance.
When considering this option, it's a good idea to get several quotes from a few different insurance companies, looking to make sure that the coverage is the same. Then, compare the two, looking for the policy with the most types of coverage, the highest limits, and the deductible that best fits your budget.
It's worth noting that bundling doesn't always give you the cheapest rates on your policies, so make sure to do that math and see if you're actually getting a deal when you pair your renters or homeowners insurance with your car insurance.
If you don't have homeowners insurance yet and are looking for a provider, CNBC Select has picked the best homeowners insurance on the market. One of our top selections, Nationwide, offers a discount if your home has smoke detectors or other qualifying protective devices, as well as discounts for bundling different types of insurance.
- Rates well below national average
- Discounts for bundling, new homes, staying claims-free and more
- Credit card fraud protection standard
- Less-than-stellar customer service reviews
- Not available in all states
- Can't purchase a policy online
For those who rent their home, coverage for your belongings is important, too. Progressive's renters insurance covers your personal belongings and also covers loss of use of your rental on top of an available bundling discount.
Progressive Renters Insurance
Availability
Progressive renters insurance is available in all 50 states and Washington, D.C.
Coverage limits
Personal property: $100,000, personal liability: $500,000, medical payments: $5,000, loss of use: $20,000
Deductible
$250 to $2,500
Add-ons
Personal injury, water and sewer backup
Pros
- Available nationwide
- Discounts for bundling, gated communities, going paperless and more
Cons
- May not cover certain dog breeds
- Some policies underwritten by third party
Take advantage of discounts for low-mileage drivers
If you don't drive to and from work every day, it's possible that you could save some money on car insurance. Calculating the number of miles that you drive accurately could make a big difference in the amount you pay for coverage.
The more you drive, the greater the chance that something could happen to your car. Insurers compensate for that risk by raising your premium. If it's possible to reduce the amount you drive, it might be worth looking into to cut down on car insurance costs.
Who qualifies as a "low-mileage driver" varies by company (and some don't consider mileage as a factor at all when it comes to premiums), but people who drive fewer than 7,000 to 10,000 miles per year generally qualify. According to Insure.com, the average driver who drives 10,000 miles pays 7% more than a driver who drives 7,500 miles.
Pay-per-mile car insurance could also be an option if you're looking to save on your premiums by cutting down on your miles. One option for pay-per-mile coverage is USAA, which was also ranked as one of CNBC Select's top picks for car insurance. While it's only available to those with military ties, USAA offers some of the lowest average premiums and boasts very high customer satisfaction ratings.
- Cheapest insurer for liability policies
- Stellar customer satisfaction scores
- Available in all 50 states
- Limited to military families and veterans
- No physical branches
- Customer service not available 24/7
- Safe-driver discount not available in every state
If you do have to drive to work every day, looking into public transportation options or seeing if it's possible to carpool with a coworker could help you cut down on the miles you drive.
Pay your premium in full, or use autopay
Even though car insurance can be a big expense, paying your premium in full could help save you some money — assuming you can afford to do so.
Many insurance companies charge a fee for dividing your insurance premium into monthly payments. According to data from car insurance comparison site The Zebra, paying up front could save you as much as 12%.
But car insurance premiums aren't cheap. Setting aside money each month could help pay for your insurance coverage when it comes time to renew. A high-yield savings account could help you save enough to pay in full the next time the bill comes due, and earn some interest in the process.
Find the best savings account for you: Help your money grow by finding the savings account that offers the best rates and features for you.
If paying in full isn't an option, you may be able to take advantage of an automatic payment discount if it's available.
Bottom line
Car insurance prices may be on the rise, but you can still save by getting several quotes and comparison shopping, raising your credit score, and if needed, raising your deductible.
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