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.
Nationwide Homeowners Insurance
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Cost
The best way to estimate your costs is to request a quote
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Maximum coverage
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App available
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Policy highlights
Policy covers home and property damages caused by theft, fire and weather damage. It also covers personal liability, loss of use and unauthorized transactions on your credit card
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Does not cover
Water damage, earthquakes, flood insurance, identity theft, high-value items, rebuilding home after loss (these can all be purchased as add-ons for extra coverage)
Pros
- Ability to manage policy online
- Bundle with other types of insurance to receive a discount
- Get a discount if your home has smoke detectors, fire alarms, burglar alarms or other qualifying protective devices
- Discount for renovating home’s plumbing, heating, cooling and electrical systems (home renovation credit)
- Receive a discount if you purchased your home within the past 12 months
- Gated community discount
Cons
- Smart home technology discount not available in all 50 states
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
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Cost
Starts at under $1 a day; premium depends on the coverage amount you choose
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Maximum coverage
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App available
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Policy highlights
Policy covers personal property damage or loss, loss of use of your rental, accidental harm caused to another person or damage to their property, injury to another person that occurs in your rental space
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Does not cover
High-value items like jewelry; additional coverage would be needed for such items
Pros
- Multi-policy discount for bundling renters insurance with other insurances (auto, boat, motorcycle, etc.)
- Discount for getting a quote at least three days before your policy starts
- Policy discount for opting in to receive insurance documents via email
- Discount for paying your policy upfront and in-full
- Discount for those living in a secured/gated community that requires key or remote access
Cons
- Coverage for water backup and damage must be added onto your policy
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.
USAA Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
USAA’s auto insurance is available in all 50 states, Washington D.C. and some international locations. In addition to low rates and coverage options for unique circumstances, such as for active-duty members, customers have access to an intuitive mobile app.
Pros
- Lowest average premium for minimum coverage
- Highest customer satisfaction ranking
- Superior discounts for military members
Cons
- Only available to military members, veterans and their immediate family members
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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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.