HOUSTON – You may have noticed the cost of car insurance is in overdrive. Many of us are getting bills hundreds of dollars higher at a time when just about everything is more expensive. Why are rates rising and how can you reduce your bill?
A team of investigators from KSAT’s sister station in Houston, KPRC 2, looked into why rates are rising and found some ways you can try to get a lower bill.
Why are car insurance rates so high right now?
It doesn’t matter if you have been accident-free for years. Across the board - your next car insurance bill will probably be higher. A drastic acceleration in rates is hitting families hard.
There has been car insurance sticker shock for Pasadena homeowner Louie Morgan and millions of other Americans.
“That’s just ridiculous. I don’t know how people are surviving these days,” Morgan said. “Since this economy went bad it just, they just skyrocketed.”
“The auto insurers are getting hit by the inflationary pressures that the rest of the economy are seeing, perhaps more,” said Michael Barry with Insurance Information Institute.
Citing costly repairs, more accidents and an increase in thefts, insurance companies’ rates are up roughly 14% from last year, according to Bankrate stats.
“For every dollar that a lot of these auto insurances took in last year, they paid out more than a dollar in terms of claims and the expenses involved in paying those claims,” Barry said.
Morgan was already paying $317 a month to insure a Tesla for himself and a Honda for his 23-year-old son. Then….
“That same company went up over $600 a month. So, I mean, that’s a hundred percent increase, right?” Morgan said. “I had two broker shops and then I shop myself and I come up with a better deal myself.”
To save money, Morgan ended up going with State Farm by bundling his car and homeowners’ insurance. He’s now paying around $400 a month.
Here’s some steps you can take to save on car insurance:
1. Bundle to save
Considering bundling your insurance is one way Barry from the Insurance Information Institute said people can try to cut their bills.
2. Change your coverage options
You can also consider reducing coverage if your car is older and raising your deductible.
“A lot of people are driving around with a $500 deductible, but they’re not going to file a claim unless it’s a thousand dollars or more in damage,” Barry said.
But - no matter what you change, Barry recommends keeping comprehensive coverage.
“That covers so many things that occur, vandalism, theft, flooded vehicle. So trees falling on cars,” he said.
3. Use tracking devices or apps
See if your car insurance company offers tracking devices or apps that can help lower your bill (We’ve shown you before how using these types of tracking techniques can save you money on car insurance rates).
4. Check for discounts
And a fourth way to save is to check for low mileage or other discounts.
“If you have a student in your household and they’re getting a 3.0 grade point average or higher and they’re a driver, they’re entitled to a discount,” Barry said.
Certain professions like first responders, police officers, teachers, and health care workers might also be eligible for discounts.
Quote Wizard, The Zebra, Cheaper quotes, Value Penguin are just a few of the online tools to help compare shop car insurance rates. Value Penguin published an in-depth report on Auto Insurance Shopping that shows in detail how much drivers across the country can save by comparing quotes.
Editor’s Note: This story was made possible by KSAT’s sister station, KPRC 2.