How to select and save money on auto insurance
Auto insurance prices have increased by 26% in 2024 compared to last year, leaving many consumers wondering how to reduce their premiums and avoid future rate hikes. With numerous options available, it's important to choose the insurance policy that best fits your budget and lifestyle. Here are some common insurance questions answered to assist you in selecting the best coverage.
Why is auto insurance increasing?
Several factors contribute to the rise in insurance premiums. At the individual policy level, these factors are typically the type of vehicle, level of coverage, driving record, age of the driver, and credit score.
On a larger scale, insurance companies account for higher claim rates because of inflated home and vehicle values, rising repair costs, increases in natural disasters, and escalating medical and legal costs.
Why is it important to have insurance?
Given these increases, some may contemplate cutting their insurance coverage to save money; however, insurance is often required by law. Most states mandate a minimum level of auto insurance coverage to ensure that, in the event of an accident causing damage or injury, there are funds available to cover the costs for those affected.
Lenders also require insurance. For instance, homeowners are required to insure their homes against damage because, until the mortgage is paid off, the lender has an interest in the property's value.
Insurance allows us to transfer the cost of potential risks to the insurance company in exchange for a premium. Reducing coverage to save money means taking on more risk personally if something unfortunate happens.
What are some ways to have sufficient coverage while saving money?
Insurance companies understand that customers have different coverage needs. To meet these needs, insurers offer a variety of coverage options and work with the customer to provide an affordable policy.
Many insurers offer discounts for bundling policies, which means you can save money by having your auto and homeowners insurance with the same company. You can also consider increasing your deductible, which is the out-of-pocket amount you pay while your insurance company covers the rest. A higher deductible often results in lower premiums because it reduces the insurer's risk.
It is advisable to shop around for better deals before your policy expiration date. Comparing rates and coverage from different companies can help you find a more cost-effective option that saves you time and money in the future.
How do I compare insurance rates?
Shopping around for insurance rates can be overwhelming, but contacting an insurance broker can simplify the process. Brokers at Mountain America Insurance Services can help you explore different companies and the coverage levels they offer.
Working with a broker also allows you to tailor your insurance needs according to your situation. Insurance companies often adjust rates to attract specific customers, such as those with certain types of vehicles or geographic areas. A broker with access to a large pool of insurers can help you find the right provider that fits your individual needs.
How can I get in touch with Mountain America Insurance Services to explore savings?
Visit macu.com/insurance or call 1-877-276-7882 to get competitive rates and coverage for your home, vehicle, RV, ATV, boat, motorcycle, life, disability, and umbrella insurance.
Disclosures
Insurance products are not NCUA insured, not credit union guaranteed and, in the case of life insurance, may lose value.
Disclaimer: This article is educational and is not meant to provide any official policy, vehicle purchasing, credit or loan advice.
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