Auto insurance is expected to rise 7% in 2023 – here are 5 ways to save

tommaso79/Getty Images/iStockphoto

tommaso79/Getty Images/iStockphoto

As the American workforce increasingly transitions back to the office full-time, many more people are out on the streets. Unfortunately, more cars on the road mean more accidents – and more accidents inevitably mean higher insurance premiums. This, combined with the high cost of cars, their maintenance and fuel, has already forced drivers to look for ways to reduce their vehicle-related expenses.

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This trend is sure to continue in 2023 as auto insurance is expected to increase due to the above factors. Though gas prices have eased over the past six months, the average driver should expect to pay $1,895 per vehicle for auto insurance this year, according to a study by Insurify.

According to Insurify’s 2022 in Review and What’s Ahead for 2023 report, rising car prices and vehicle accidents will cause insurance rates to increase by 7% from 2022 (or 29.5% from 2020). This is the first time monthly insurance premiums have exceeded $150 per Axios.

The two-part report analyzed more than 69 million insurance quotes and polled more than 1,800 participants to track insurance price trends from state to state, forecast costs for 2023 and find out how motorists will save money as rates increase.

“The general consensus is that it will take eight to 12 months (from fall 2022) for rate hikes to slow down, and some believe it could take several years for prices to fully stabilize,” explained Insurify’s Betsy Stella in the report.

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The projected rate hikes will have Americans looking for ways to save money on insurance. Some insurance companies offer bundle insurance discounts, while others offer usage-based auto insurance. If you can qualify for any of these options, you should seriously consider them.

However, according to Insurify, when asked in July and November, drivers tried the following five vehicle cost-saving techniques.

1. Drive less (65% in July vs. 50% in November)

Those concerned with climate change have been reducing their direct emissions by driving less for years. Now those fighting insurance and gas price hikes are making the same change. Saving fuel is the primary bonus, but those with usage-based insurance plans can also save this way.

2. Switch to another insurance provider (30% in July vs. 35% in November)

If you want to buy car insurance (or switch to another provider), you should treat it like buying a car. Auto insurance is a necessity, but many drivers stick with their insurer even if they overpay. As reported by Forbes, the Insurance Information Institute (III) recommends getting quotes from at least three insurers when deciding on a new provider. Using a site like EverQuote gives you a wide range of insurance options – and can potentially save you hundreds of dollars a year. It may be advisable to look into pay-as-you-go insurance as well.

3. Purchase of an electric or hybrid vehicle (30% in July vs. 16% in November)

As gasoline prices began to fall in the second half of 2022, so did drivers’ interest in buying a hybrid or electric vehicle, the study found. But 30% and 16% of respondents in July and November, respectively, were still considering switching to an electric or hybrid car model for cost reasons.

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4. Move to a cheaper location (16% in July vs. 10% in November)

A slightly significant 16% of people surveyed by Insurify in July said they would consider moving somewhere with better public transportation and sidewalks to save money on auto insurance. The average American saw a 9% increase in insurance premiums in 2022, with the largest increases seen in Oregon, Maryland, Virginia and Idaho, where drivers saw rate jumps of over 25% between 2021 and 2022. Drivers in Michigan saw their insurance premiums increase by just 1% in 2022, but it’s still the most expensive state to buy auto insurance in the country.

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5. Waiver of their entire insurance coverage (10% in July vs. 12% in November)

One of the benefits of working from home was that they didn’t have to endure the daily commute. As more workers return to work, many are reconsidering their car use.

If giving up driving is not an option, car owners can try to optimize their coverage. If you drive infrequently, have an old car with a lot of mileage, a vehicle that’s worth less than your insurance policy says – or prefer to pay for accidental car repairs yourself – it might be a wise idea to get your “full” insurance policy per car and driver .

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This article originally appeared on Auto insurance expected to rise 7% in 2023 – Here are 5 ways to save

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