More than 20% of American drivers bought less insurance than they wanted in 2023 due to high costs — here's how that could be avoided

It's no secret that auto insurance expenses have kicked into high gear recently. In response, many drivers try to lower their insurance bill by purchasing less coverage. According to a new report published by Jerry, more than one in five (22%) American drivers bought less insurance than they wanted in 2023.

If you opt for less coverage, your premiums might indeed go down. However, you'll also expose your finances to a greater risk of a disaster. CNBC Select breaks down the report's findings and offers advice on how to save money and still get the coverage you need.

According to the report, 22% of U.S. drivers said they bought less coverage than they wanted last year. The trend was especially prevalent among young people. Specifically, 39% of Gen Z drivers and 32% of millennials reported they didn't purchase as much coverage as they wanted due to the high cost.

Auto insurance is an essential financial protection for a car owner that protects you from paying for costly repairs and medical bills that could otherwise wreck your savings or put you in debt. Most of the time, you need more than the state legal minimum for optimal coverage.

The best way to get a good deal on auto insurance is to gather quotes from multiple providers. However, the report states that only 38% of survey respondents shopped around for car insurance. At the same time, according to Jerry customer data, 60% of people who comparison shop end up saving on their coverage.

CNCB Select ranked Geico as the best overall cheapest car insurance. We found that the company offers the lowest average rates and has high ratings for customer satisfaction — plus, Geico advertises 16 discounts.

Amica is another excellent option for affordable coverage. It also boasts high customer satisfaction ratings and lists 18 available discounts, including for bundling, defensive driving training and anti-theft devices.

If you haven't shopped for car insurance before, you might be unsure how it works. Luckily, the process is rather simple and usually involves the following steps:

• Gather the required information and documents including your driver's license and your car's VIN number, mileage, make, model and year. You'll need these to collect auto insurance quotes.
• Get quotes from several providers for the kind of coverage you want. Aim for at least three to four quotes from reputable companies.
• Compare the quotes. Pay attention to the types of coverage included, policy limits and deductibles, as well as premium amounts.

Now you can choose the policy that's both affordable and fits your needs. Remember that you can also switch car insurance at any time so don't hesitate to take this step if it means lower premiums and better coverage. Just make sure you're aware of the potential cancelation fees and avoid any lapse in coverage when canceling car insurance with your current provider.

It may be tempting to buy less coverage than you think you need to save money. However, this course of action may be risky as it leaves you financially vulnerable. To get the coverage you need at a reasonable price, shop around for auto insurance and gather quotes from multiple providers.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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