SALT LAKE CITY (KUTV) — Car insurance policies have surged by 20 percent across the United States over the past two years, with the national average for an annual policy now standing at $2,311, according to Bankrate.
In Utah, the average cost is slightly lower, about $300 less than the national average. Shannon Martin, an analyst with Bankrate, said Utah drivers pay an average of $2,078 per year for car insurance.
“Car insurance is now a really high monthly bill for most Americans,” Martin said.
You can blame everything from inflation to credit scores for the cost of your policy.
Martin said car parts, car repairs and trips to the hospital cost more nowadays and policies reflect that — but, insurers also consider your credit score to determine your level of risk.
“Bankrate found drivers with poor credit pay as much as drivers who have DUIs,” she said.
If you have a low to fair credit score, it’s a good reason to improve your score and take your improved score to a new insurer who might offer you a better rate.
To help reduce insurance costs, Martin also suggested reviewing your policy and asking your agent about potential discounts. For example, taking a defensive driving course or having a teen driver with at least a 3.0-grade point average can qualify you for discounts.
Additionally, consider whether you need extras in your policy, such as lock-out or towing coverage, which you might already have through a credit card or another roadside service.
Martin also said that you can lower your premium by opting for a higher deductible policy, but she emphasized the importance of having the deductible amount saved in the bank in case of an accident.
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She warned against skimping on liability coverage, as it could lead to high out-of-pocket expenses after a crash.
“One thing we don’t want people to do is to get rid of coverages that protect them financially, like lowering your liability limits,” Martin said. “Right now, your liability coverage won’t go as far as it used to, so you should really look at increasing that coverage rather than decreasing it. Yes, it will cost you more, but you will be surprised how little it costs.”
When reviewing liability limits or any other changes in your policy, take all these questions and issues to your agent first, then decide if you want to shop around because the reality is, premiums are higher with all insurance companies.
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.