Have you noticed your insurance rates go up recently? Insurance companies have been raising rates in all categories, from car insurance to home and life insurance, adding to the increasing cost of living.

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Money expert Rachel Cruze recently posted a YouTube video with some advice to Americans looking to save as much as possible on their insurance costs. Here’s what she had to say — and some insurance policies you can skip.

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Why Is Insurance More Expensive Now?

Cruze mentioned that people around her, as well as those who call into the Ramsey Show, regularly tell her that they are having trouble with their insurance. Rates have gone up significantly, and some insurance companies have begun to refuse coverage for certain vehicle models.

Car insurance rates, for example, have gone up 26% in 2024. Online insurance marketplace Insurify predicts a 6% rise in home insurance premiums this year, which comes after a reported 11% increase last year.

So why is insurance getting so expensive? There may be several reasons. Cruze mentioned three given by insurance company CEOs:

• Increased service and claim costs: Insurers say that they are raising premiums because the costs to service policies and settle claims are going up.

• More natural disasters and population growth: As natural disasters become more frequent and severe, insurance claims for damages rise.

• Inflation: As in other sectors, inflation is affecting the insurance industry. The costs associated with underwriting and claims have gone up, which means consumers have to pay more for their policies.

However, this might not be the whole story — Cruze pointed out that rates are rising faster than inflation. If insurers are raising prices only to offset their increased costs, then you would expect the amount of money they make to remain around the same. Unfortunately, the data shows something else.

Insurance companies are reporting record earnings. In 2023, insurance companies had their most profitable year in history for the property casualty insurance industry, with $88 billion in total profits. This is more than double the earnings in 2022.

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How You Can Lower Your Insurance Costs

So is there a way you can lower what you’re paying for insurance, despite rising costs? Cruze had five pieces of advice to maximize what you’re getting from your insurance.

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Get Rid of Unnecessary Coverage

Cruze said reviewing the coverage you have and eliminating unnecessary insurance is one of the first things you should do to save on your insurance bill.

Some coverages, like whole life insurance, accidental death insurance and policies marketed towards children, such as Gerber Insurance, are typically not cost effective, according to Cruze. If you have these, reassessing and removing them can significantly reduce your monthly expenses.

Be Proactive and Ask Questions

Insurance companies often count on customers not scrutinizing their bills or the details of their coverage. Cruze encouraged everyone to be diligent by calling their insurance providers or meeting with HR representatives at work to thoroughly understand their benefits and insurance policies.

This way, you can uncover any errors, overcharges or opportunities to adjust your coverage.

Optimize Family Insurance Plans

If you and your spouse both have insurance plans from your employers, it can be a good idea to compare terms and coverage. Evaluate whether it’s more cost effective for one spouse to cover the family and the other to opt for individual coverage or whether a different arrangement might save more money.

According to Cruz, you may be able to save hundreds or thousands of dollars annually by getting in the weeds on your insurance terms.

Prepare for Emergency Expenses

Cruze highlighted the importance of preparing for unforeseen medical expenses, which are a common cause of debt for many Americans. She recommended you establish an emergency fund of at least $1,000 to mitigate the impact of such expenses.

She added that if you have any debt, especially medical debt, you should try to negotiate with creditors or seek adjustments on your bills. You may find that you can cut down your debt significantly with a few phone calls.

Don’t Skip These Two Types of Insurance

Finally, Cruze pointed out two often-overlooked types of insurance — renters insurance and identity theft insurance.

According to Cruze, renters insurance is incredibly affordable and protects your belongings in case of disasters or theft. For around $12 to $20 a month, you can make sure that you don’t lose everything you have in your apartment in the case of a house fire or other emergency.

Cruze recommended identity theft insurance because the financial consequences of identity theft can be severe, and the possibility of it happening rises with the increasing digitization of our lives.

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This article originally appeared on GOBankingRates.com: Rachel Cruze: This Is Why Insurance Rates Are Going Up — And 5 Ways To Save