Car insurance rates rose last year. AAA reports a married middle age single man with excellent driving record rose to more than $1200, a 10% increase over the previous year.
If you’ve been hit with a rate hike, you could be in for more.
An average cost for payout on claims rose 30%+, even though accidents are declining as they fell 14% according to the Insurance Research Council. Inflation also has gone up 20% during this time period.
Fatalities are on the rise, and was the largest increase in 50 years (nearly 10%). Insurance companies will struggle as banks low interest rates hinder consumers accounts, and insurance companies are not earning on their invested premiums.
Rising premiums and what you should do…
Many factors come into play when your rates go up. Don’t think just because your driving record is spic and span means you are protected from a rate hike. Things like what area of town and state have a major impact, as well as your credit rating.
1. Look at Higher deductibles.
You may want to avoid $250 and $500 deductibles and go for $1000-1500. Higher deductible will curve the temptation to make small claims which will save you plenty.
2. Go Shopping.
About 70% of consumers do not compare prices and about 55% have been with their same company for over 15 years. You are able to cancel at any time. Don’t wait for your next renewal notice.
3. Loyalty doesn’t always work
While you may see a low 2% to 5% savings for long-term policyholders. Most have none, and you may want to shop homeowners and auto at same time to find bundle discounts to save you even more.
Statistical Reference: Consumer reports author: Carla Fried.