How to Save on Car Insurance Despite Rising Premiums, According to Allstate

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Auto insurance costs have risen dramatically in recent months, even outpacing record inflation, according to recent data. Here are some ways to save on your car insurance policy. (Stock)

Mounting inflation consumers are paying more at grocery stores and gas pumps, but some cost increases are being felt more subtly. Data shows that car insurance premiums are currently outpacing inflation, meaning drivers may experience sticker shock when it’s time to renew their policy – likely at a much higher rate.

Average car insurance rates rose 3.75% in 2022 alone, according to the Consumer price index (CPI). Despite this strong increase, the Insurance Information Institute (Triple-I) said premiums are not “skyrocketing.” Instead, they are returning to pre-pandemic levels as policyholders return to their usual driving habits.

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During the COVID-19 lockdown, some U.S. employees started working remotely and drove fewer miles. This led to a sudden drop in rates in the spring of 2020 as insurance companies responded to an unforeseen change in Americans’ driving habits.

But drivers are now hitting the road more often as restrictions are lifted, leading to an increase in crash frequency and severity, Triple-I reported. Additionally, spare parts are becoming more expensive due to inflation and supply chain issues. As a result, auto insurers have had to raise premiums to offset loss ratios and stay profitable.

To help consumers offset rising costs, Allstate has shared ways to save money on car insurance. Keep reading to learn more about how to lock in cheaper car insurance, and visit Credible to compare free quotes without affecting your credit score.

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Allstate: Tips to save money on car insurance

Car insurance companies set premiums based on type of coverage, amount of deductible and your risk rating, which includes:

  • The zip code and state where you live
  • Your age, gender, marital status and credit score
  • The make and model of your vehicle
  • Use of your vehicle and average mileage traveled
  • Your driving record, including accidents and speeding tickets
  • Any previous insurance claims you have filed

Given these eligibility requirements, there are several ways to lower your car insurance costs, according to Allstate. Learn about each money saving strategy in the sections below.

1. Bundle your auto and home insurance

If you have more than one type of insurance policy, such as homeowners insurance or tenants insurance, you may be eligible for a multi-policy discount through a single insurer. Credible estimates drivers can save up to 30% by combining their home and automobile policies.

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2. Look for insurers that offer low mileage discounts

Recreational drivers and remote workers may be eligible for usage-based insurance (UBI), which allows you to pay based on the average number of miles driven. To determine your mileage, insurance companies may require you to install a plug-in device that tracks your driving behavior.

Similarly, some car insurance companies offer insurance at a reduced price which rewards safe driving habits. It uses similar technology that can be used through a mobile app or tracking device that monitors speeding, rapid acceleration, and hard braking.

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3. Review your policy for additional car insurance discounts

Insurance companies usually offer a number of discounts for paying your premium in full up front, signing up for automatic payments, or taking a safe driving course. Some companies also offer discounts for installing an anti-theft device, such as GPS tracking systems.

In addition to these measures, drivers may be able to save hundreds shopping. Get at least three quotes from different car insurers based on different types of coverage to find the lowest possible premiums for your financial situation. You can visit Credible to view car insurance quotes for free.

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You have a financial question, but you don’t know who to contact? Email the Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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