‘We expect rates to continue to rise.’ Car insurance already costs nearly 14% more than last year. Here’s the best thing to do now to combat that.

Like eggs, postage and dining out, auto insurance costs are on the rise in 2023. According to data from Bankrate’s annual True Cost of Auto Insurance report, the cost of full coverage auto insurance is $2,014 per year, up from $1,771 in 2022 — a 13.72% increase. “We expect rates to continue to rise in 2023. Full coverage car insurance premiums rose due in part to inflation, supply chain disruptions and labor shortages. These factors all individually increase the cost of claims and when combined, drove up the cost of repair or replace vehicles significantly,” says Bankrate analyst Cate Deventer.

You personally may have noticed that the cost of your car insurance crept up, and pros say it’s smart to shop around because premiums can vary by quite a bit. Indeed, if you forgo shopping around, “you may end up spending several hundreds of dollars more a year on car insurance than you need to unless you get several quotes. Paying more doesn’t necessarily mean you’re getting a better product,” says Michael Orefice, SVP of operations at SmartFinancial. Indeed, WalletHub reveals that drivers will likely save between 10% and 20% on their premiums by switching carriers.

For his part, Scott Holeman at the Insurance Information Institute, also says shopping around is essential. He notes that you should review your coverage annually “at renewal time to make sure your insurance coverage is in step with your needs. Get at least three quotes from different insurance companies and different types of insurance companies, that is, those that sell through their own agents, those that sell through independent agents and those that sell directly to consumers via the phone, an app or the internet,” he says. 

Another thing to keep in mind is that not every company uses the same information for underwriting. “Some take credit history into account while others are all about driving history and that’s it. This is why you really need to shop with as many companies as possible so you have as many options as possible,” says Michael Giusti, analyst at InsuranceQuotes.com. It’s also important to make sure you’re comparing everything apples-to-apples. “Don’t look at one company asking for one coverage and compare it with another with different limits,” says Giusti.

Before beginning the quest for a suitable insurance policy, Giusti says you need to have a clear idea of what you’re looking for. “Make a list of wants and needs. Do you need full coverage? Can you live without comprehensive? If you are unsure what that even means, start by talking it through with an agent and understand what risks are involved,” says Giusti.

Experts also recommend asking friends and relatives for their recommendations and researching the company before committing. “Ask questions and make sure you have a good understanding of what you are buying. Anyone you speak to should be able to answer questions to your satisfaction. Remember, these are the people you’ll rely on if the worst happens and you need to make a claim,” says Holeman.

And it’s not just about price. “A good deal doesn’t always come down to the price of your premium. It’s also about making sure you get the coverage you need so you aren’t left with a massive bill if something happens. Not having enough coverage could leave you responsible for paying tens of thousands of dollars or more out-of-pocket in an accident, so make sure you’re looking at the fine print to be sure of what you’re getting,” says Rachael Brennan, licensed property and casualty insurance expert at Policygenius. This guide can help you figure out exactly how much insurance you need.

What factors might impact what I pay for insurance?

Where you live and the type of drivers on your policy are also indicative of how much you’ll pay. Adding a teen driver to a policy can be the most expensive life event for auto insurance consumers, driving up insurance an average of about 14%, the Bankrate report revealed. The report also reveals that drivers in Miami, Tampa, Detroit, Orlando and Los Angeles are the most expensive metros for auto insurance premiums. At the other end of the spectrum, Charlotte, Portland, Washington DC, Seattle and Boston are the least expensive metros.

Other factors determining one’s cost of coverage include receiving a speeding ticket, being involved in a car accident, having a lapse in auto insurance and being convicted of a DUI. “If you have been affected by a rate increase, you may want to consider shopping with other carriers, taking advantage of discounts and maintaining safe driving habits,” says Deventer. 

How might I pay less for car insurance — besides just shopping around for it?

To start, people who drive very little and those in certain professions may get discounts on auto insurance. “The highest car insurance discounts based on profession go to teachers and those in the education sector, nurses, doctors and other medical practitioners, police officers and detectives, engineers, farmers and agricultural workers, lawyers and military personnel and their families,” says Orefice. Here are 21 ways to save on car insurance.

You can also lower your rates by taking a defensive driving course if you have an accident or traffic violations on your record. “One course will lower the points on your license and bring you closer to your ideal premium,” Orefice adds.

 Another option for savings? Raise your deductible and reduce optional insurance on older cars. “By choosing a higher deductible on your insurance, you can significantly lower your premium costs. And as a rule of thumb, if your older car is worth less than 10 times the insurance premium, having collision and/or comprehensive coverage may not be cost effective. To find out whether this is true for you, check the value of your car using sites like Kelley Blue Book, National Association of Auto Dealers (NADA) and TrueCar,” says Janet Ruiz, director of communications at the Insurance Information Institute.

Three of the biggest mistakes that will cost you, according to says Laura Longero, executive editor at CarInsurance.com, are not understanding the ins and outs of your policy, neglecting to shop your policy at renewal time and not asking your insurer about discounts. “Ask about discounts, everything from airbags to driver experience can net a discount and those discounts can add up to save you quite a bit of money,” says Longero.