New Jersey among states with fastest-rising car insurance rates. Here's how to pay less
If you're tired of sticker shock on your car insurance bill, you're not alone. Premiums have shot up a whopping 30% since 2023, according to the Bureau of Labor Statistics.
That amounts to more than $600 annually on average.
The typical driver is now paying more than $2,600 a year. New Jersey is among the states where rates are rising the fastest, according to Bankrate.com. Notably, rates remained steady in Pennsylvania.
But you can take action to lower your costs.
Compare multiple quotes
Experts say it always pays to shop around.
Not all insurers rate risk the same way, according to AARP. The same driver could see rates vary by hundreds of dollars depending on the company.
You should always try to get quotes from at least three difference companies. Insurance comparison websites like CarInsurance.com and Insurify can help you weigh your options.
Increase your deductible
Raising your policy's deductible — what you have to pay out of pocket before insurance kicks in — is another way to help you save.
Bumping up your deductible from $200 to $500 could lower your insurance costs by 15-30%, according to the Insurance Information Institute.
But before choosing a higher deductible, the Insurance Information Institute advises you to be sure you have enough money set aside to pay it if you have a claim.
Let insurance monitor your driving
Some insurance companies can track how you drive, if you request it, to monitor your driving habits and adjust your rates accordingly.
But before you enroll, AARP says to check with your insurer to confirm if risky driving could negatively impact your rates.
Reduce coverage on older cars
If you drive an older vehicle that isn't worth as much, you could be paying for unnecessary coverage. If your car is worth less than 10 times the premium, according to the Insurance Information Institute, purchasing comprehensive or collision coverage may not be cost effective.
Dropping comprehensive coverage, which pays for non-accident damage, or collision coverage, which pays for damage done to your vehicle in a crash, can save you money. Consumer Reports found dropping collision and comprehensive insurance could save you more than $1,000 a year.
Don't forget other discounts
Many companies offer discounts to policyholders who bundle their auto and home insurance, for example.
Opting for something as simple as putting your bill on autopay could also save you.
Paying the entire year up front might also get you a discount. Most insurers offer a "paid-in-full" discount, which could be as high as 20 percent, for paying your entire premium at once.
If you're not driving as much anymore because you're retired or working from home, look into low-mileage discounts.
Maintaining good credit can also cut insurance costs. Most don't realize insurers use credit information to price policies. Here are ways to review your credit report for errors and improve your score.