Like many Americans, you’ve probably watched your car insurance premiums go up hundreds of dollars over the past two years. Even as inflation has cooled, insurance prices have remained high due to more crashes resulting in more payouts, plus increased litigation and higher repair costs. Nationwide, the average premium increase was almost 19 percent more than it was the year before, according to the Bureau of Labor Statistics.
Today, the average premium price is $2,329 a year, according to Bankrate.com, an online personal finance comparison platform. But people in some states are experiencing even more pain, with the average annual premium in Colorado, Florida, Louisiana, Nevada, and New York all well over $3,000. Among the 40,566 American policyholders surveyed by Consumer Reports earlier this year, 38 percent reported an increase of between $50 and $199 within the previous 12 months, and 22 percent said their annual premium had gone up $200 or more.
In this article
- How to Save Big : 9 Ways to Save How Much Liability Coverage Is Enough? Life Events That Can Affect Your Car Insurance Rates If You're Over 70, Read This
How can you lower your premiums? For starters, consider switching insurance companies. According to CR’s 2024 auto insurance survey, 30 percent of those surveyed had switched insurers in the past five years, most of them to save money on premiums. Those who did saw a median annual savings of $461. The survey also found that most policyholders were unaware that their insurance companies had automated driver monitoring programs available—usually through a smartphone-based tracking app—but that those who signed up for it saved a median of $120 on their annual premiums.
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CR recommends shopping for better rates from competing insurers every year or so and, at the same time, reviewing your policy to see how changes in your life may affect your insurance needs. Those changes might include moving to a new town or state, getting a new job, or retiring.
“If you haven’t given your insurance a hard look in a while, you could be paying too much, not have enough coverage, or both,” says Chuck Bell, Consumer Reports’ programs director for advocacy.
We’ll tell you which life events might cause your insurance needs to change, as well as how you can get the lowest rates possible with the top insurers from CR’s 2024 auto insurance survey.
1. Increase Your Deductible
How much you can save: $464 to $525 a year.
This timeless insurance advice saves you money because you’re increasing your potential out-of-pocket cost for repairs after a crash. Loretta Worters, vice president of media relations for the Insurance Information Institute, says that increasing your deductible from $500 to $1,000 can bring your annual premiums down by 20 to 25 percent, on average.
“Just make sure you can afford to pay cash for repairs if you need to,” Bell says. “The average motorist doesn’t file a claim more than about once every couple of decades, so your likelihood of having to shell out for crash damage is actually pretty low.”
2. Drop Collision and Comprehensive Insurance
How much you can save: About $1,165 a year.
Collision insurance covers damage to your car if you’re involved in a crash (or if you’re the victim of a hit-and-run) and comprehensive covers damage caused by acts of nature (such as storm damage), vandalism, theft, fire, and more. As the years and miles pile up on your car, its value will decrease. Eventually, that lowered value may no longer justify the expense of paying for collision and comprehensive coverage. “As a general rule, when the premium is more than 10 percent of the car’s value, it’s time to consider dropping collision, and maybe comprehensive, too,” Bell says. You may want to keep comprehensive a bit longer because it includes glass coverage, which is always nice to have if a rock hits your windshield and cracks it. But if you’re scaling back to liability-only coverage, make sure you have enough to protect yourself from having to pay out of pocket for someone’s property damage and medical expenses if you’re found at fault in a crash. (See "How Much Liability Coverage Is Enough?" below.)
3. Take a Defensive Driving Course
How much you can save: $233 a year.
Some insurance companies will allow you to take a safe-driving course to get a discount, although you’ll have to take it again every few years to keep the discount active. In New York, for example, where insurance premiums cost nearly $3,700 per year, on average, motorists can receive a 10 percent discount after taking a state-approved defensive driving course. (The course costs about $25, takes 5 hours and 20 minutes to complete, and can be repeated every three years.) Many other states have similar programs, although prices vary widely. In Virginia, where the average cost of insurance is just over $2,000 per year, the course takes 8 hours and starts at $25.
4. If You Drive Under 10,000 Miles a Year, Report Your Mileage
How much you can save: About $116 a year.
“Most insurance companies include annual mileage in their pricing methodology, and lowering your miles can save you money,” says Douglas Heller, director of insurance with the Consumer Federation of America. For instance, if you’re driving less because of a change in your job location, you may qualify for a lower premium, especially if you’re driving less than 10,000 miles in a year. “Some companies offer verified mileage programs where you can get even more savings by reporting your odometer reading on a regular basis.”
5. Bundle Your Auto Coverage With Your Homeowners Insurance
How much you can save: $348 a year.
Heller says that some companies offer discounts on annual premiums when you purchase both your home and auto policies from them. But he points out that everyone’s situation is different, and while one person might save money by bundling two types of insurance, another might save money by buying each policy from a different company. The bottom line: Bundling is worth looking into, but it’s not a one-size-fits-all way to save on your premiums.
Check CR’s review of the best homeowners insurance companies.
6. Pay Out of Pocket for a One-Car Fender Bender
How much you can save: $348 or more (depending on your driving record).
If you’re involved in a crash with another vehicle that results in property damage, many states require that you submit a collision report (and you must report a crash with injuries or death to the police). But for minor damage that doesn’t involve another driver—such as scraping your bumper on a support column in a parking garage—paying out of pocket and not filing a claim could prevent a potential rate increase. Keep in mind, though, that what seems like minor damage to a car equipped with safety features such as automatic emergency braking and blind spot warning could be far more expensive to repair than you think. So make sure you get a repair estimate before you decide to shoulder the financial burden on your own.
7. Get an Independent Insurance Agent
How much you can save: Hundreds of dollars.
To make comparing coverage and premiums from several insurance companies easier, consult an independent agent. Unlike an agent who represents a single company, an independent agent represents a number of insurance companies, including some that may not be on your radar and could offer the best deal, Heller says. (Insurance brokers are also independent, but he says they’re more appropriate for businesses than for individual customers.)
8. Consider a Dividend Policy
How much you can save: $116 or more.
Amica and NJM, two of the top-rated insurers from CR’s ratings, are among the companies that allow customers to choose between a traditional insurance policy and a dividend policy. Dividend policies may have higher premiums, but because policyholders own a stake in the company’s investments, they can get money back in the form of dividend payments. In the case of Amica, that could be 5 to 20 percent, depending on market fluctuations. “Dividend policies can help reduce the overall cost of coverage and may help you save even more when both your auto and home are covered by the same mutual insurance company,” Bell says.
9. Sign Up for Driver Monitoring
How much you can save: $931.
Some insurance companies offer a discount if you allow them to monitor your driving habits with a smartphone app or a device that plugs into your car’s diagnostic port. There’s a potential for savings, but you have to be okay with giving up a certain amount of privacy, allowing your insurer to track your every move in much the same way that you do when using certain smartphone apps. If driver monitoring is available in your state and offered by your insurance company, Bell suggests doing some fact-finding before deciding whether it’s right for you. Start by asking your insurer what data it will use to calculate a discount, whether any negative driving behavior has the potential to actually increase your rate, and how all the data collected can and will be used. “Ask your insurer if they will sell or share your data with other companies before you agree to one of these programs,” he says. “And if you tend to drive more at night because of work or some other reason, make sure you won’t get dinged for it.”
How Much Liability Coverage Is Enough?
Insurance companies offer several types of coverage to protect you financially when you’re involved in a crash. But the most important is liability coverage, which pays for costs related to the injury or death of passengers in another car as well as any damage to other vehicles and property if it’s determined that you were at fault in a crash. (Liability coverage also covers passengers in your car.)
Almost every state requires liability coverage. In Virginia, for example, the minimum coverage required by law is $30,000 per person and $60,000 per incident for bodily injury or death of two or more people, and $20,000 for property damage. (This is usually stated on an insurance policy as $30,000/$60,000/$20,000 or simply 30/60/20.) Experts say most state minimum coverage requirements are woefully inadequate. Douglas Heller of the Consumer Federation of America cites as an example a driver covered only by Virginia’s minimum requirement who causes a crash in which three people have $50,000 in medical bills per person. The driver’s insurer would cover $20,000 of each injured person’s medical bills, leaving the driver responsible for any outstanding bills—in this example, $90,000.
How much coverage is enough? Loretta Worters of the Insurance Information Institute recommends a minimum liability coverage of $100,000/$300,000/$100,000. For more protection, experts recommend purchasing an umbrella insurance policy on top of higher-limit liability coverage. An umbrella policy added to a homeowners policy extends liability protection to $1 million or more, and depending on the insurer, fills whatever gaps may have been left by auto and homeowner policies.
You can usually buy an umbrella policy only from a company that you’ve already purchased insurance from. Prices vary depending on what types of coverage you already have—car, home, boat, business, etc. You also need to know how high your basic liability insurance needs to be and if your insurer requires bundling all of your policies to get the umbrella policy. Worters says a $1 million umbrella policy typically adds $250 to $300 to your annual premiums.
There’s also coverage that pays for damage caused by uninsured and underinsured motorists, as well as personal injury protection or medical payment coverage, which covers your own injuries if the other driver has inadequate coverage or none at all. Worters says these are always good to have.
Life Events That Can Affect Your Car Insurance Rates
Getting Married or Divorced
Adding a driver to a policy can increase premiums, but if that person has a clean driving record, your rates shouldn’t change much. Adding someone with a history of filing claims or with moving violations on their record, on the other hand, can increase your rate, whereas removing that person can result in significant savings.
Changing Jobs
You could pay a lower premium if your new commuting distance is shorter or if you’re now working from home. You can generally save a little over $100 on your annual premiums if you drive less than 10,000 miles per year.
Moving to a New Area
Insurance rates are highly dependent upon where you live. According to quotes from USAA, a move from suburban Scottsdale, Ariz., to urban Phoenix would raise your annual premiums by about 8 percent (around $200 in our test case). Your premium could drop if you move from a city to a more sparsely populated area. And if you move to an area with a high probability of severe weather events (such as hurricanes or floods), you’re likely to see your premiums rise.
Adding a Teen Driver
Drivers between the ages of 16 and 17 are more likely to be involved in a crash than any other group. Adding a teen driver to your insurance policy can increase it by a staggering $1,000 to $2,000 a year or more.
If You're Over 70, Read This
Car insurance premiums tend to decrease as you age. But that can change once you reach your 70s, which is when crash rates begin to slowly tick up, according to the Insurance Institute for Highway Safety (IIHS). Based on average annual insurance costs from Bankrate, premiums for 70-year-old drivers are about 8.5 percent higher than for drivers who are 60 years old.
“If you’re an older driver who hasn’t been in a crash and your rates go up sharply, consider changing insurers,” says Chuck Bell, CR’s programs director for advocacy. “You can ask your existing company to provide a more competitive quote, but be prepared to vote with your feet if you don’t like its answer.”
Bell says that some insurers, including Geico and The Hartford, offer preferential rates for older drivers. “Just like drivers in other age groups, aging motorists can save money on insurance by reassessing their needs and switching carriers if they can get a better deal,” he says.
Upgrade to a car with advanced safety systems. Cars with active safety equipment like automatic emergency braking (AEB) and strong crash-test ratings are good for everyone, but especially for older drivers. That’s because those drivers are more likely than other motorists to suffer from serious injuries if they’re in a crash, the National Highway Traffic Safety Administration says. According to two IIHS studies, older drivers tend to drive older vehicles that lack lifesaving features such as blind spot monitoring, side or curtain airbags, forward collision warning, or automatic emergency braking.
Take a driver education course. Classes for mature drivers could reduce your risk of a collision or injury and related expenses. Groups like AAA offer programs to help older motorists with declining hearing, eyesight, flexibility, and other conditions that can impair driving ability, help them adapt their habits, and sharpen their skills. AARP, for example, offers a discount on these courses to members.
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Editor’s Note: This article originally appeared in the November/December 2023 issue of Consumer Reports magazine.
Benjamin Preston
Benjamin Preston has been a reporter with the Consumer Reports autos team since 2020, focusing on new and used car buying, auto insurance, car maintenance and repair, and electric bikes. He has covered cars since 2012 for the New York Times, Time, the BBC, the Guardian, Road & Track, Car and Driver, Jalopnik, and others. Outside CR, he maintains his own small fleet of old cars and serves as a volunteer firefighter, specializing in car crash response and vehicle extrication.
