Anticipating an 8.4% increase in car insurance rates in 2023: Saving Tips You Should Know

The cost of car insurance increases in 2023. According to personal finance website ValuePenguin, insurance rates across the United States are expected to rise by 8.4%, bringing the total average premium for full coverage to $1,780 per year.

More expensive cars and higher repair costs are two reasons mentioned by ValuePenguin as reasons for a possible tariff increase. In addition, workers returning to their daily commute and an increase in hurricane-related claims due to climate change will also make you pay more for your insurance coverage if these predictions prove to be true.

If you are a car owner who is already frustrated by last year's price increase, do not exchange your car for a bus ticket right now. Here are three ways to make sure you find the best car insurance deal for you.

Combine your renters or homeowners insurance with your car insurance

If you already have homeowners or renters insurance, you may be able to save money on your car insurance by getting car insurance from the same company.

According to InsuranceQuotes data, the average driver saves about 16% on their insurance premiums by combining their homeowners insurance with their car insurance.

When considering this option, it's a good idea to get multiple quotes from several different insurance companies, ensuring that the coverage is the same. Then, compare the two, looking for the policy with the most coverage type, highest cap, and amount of self-coverage that best fits your budget.

It's important to remember that merging doesn't always provide the lowest rate on your policy, so be sure to do the math and see if you actually get a quote When you combine your renter's or homeowner's insurance with your car insurance.

If you don't have homeowners insurance yet and are looking for a provider, CNBC Select has selected the best homeowners insurance on the market. One of our top picks, Nationwide, offers discounts if your home has smoke detectors or other eligible protection devices, as well as discounts for combining different types of insurance.

Take advantage of discounts for drivers with low mileage

If you don't drive to and from work every day, maybe you can save some money on car insurance. Accurately calculating the number of miles you travel can make a big difference in the amount you pay for coverage.

The more you drive, the more likely it is that something will happen to your car. The Insurance Company compensates for the risk by raising your premium. If it is possible to reduce the amount you drive, it may be worth considering it to reduce the cost of car insurance.

Who qualifies as a" low-mileage driver " varies by company (and some don't even consider mileage as a factor at all when it comes to premiums), but people who drive less than 7,000 to 10,000 miles per year generally qualify. According to Insure.com, the average driver who drives 10,000 miles pays 7% more than a driver who drives 7,500 miles.

Payment-Per-Mile based car insurance can also be an option if you want to save money on premiums by reducing the number of miles you travel. One of the payment-per-mile-based coverage options is USAA, which is also on CNBC Select's list of top choices for car insurance. Although only available to those with military links, USAA offers some of the lowest average premiums and has very high customer satisfaction ratings.

If you have to drive to work every day, looking for public transportation options or seeing if it's possible to share a vehicle with colleagues can help you reduce the number of miles you drive.

Pay your premium in full, or use automatic payments

Although car insurance can be a big expense, paying your premiums in full can help save you money - as long as you can afford it.

Many insurance companies charge a fee if you divide your insurance premium into monthly payments. According to data from car insurance comparison site The Zebra, paying all at once can save you up to 12%.

However, car insurance premiums are not cheap. Setting aside money each month can help pay for your insurance coverage when it's time to renew. A high-interest savings account can help you accumulate enough money to pay in full when the bills come, and also earn a little interest in the process.

If paying in full is not an option, you may be able to take advantage of an automatic payment discount if available.

Conclusion

Car insurance rates may go up, but you can still save money by getting multiple quotes, comparing, improving your credit score, and if necessary, raising the coverage amount yourself.

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