How do people cope when budgeting for higher auto insurance costs? Unfortunately, we discovered that some drivers have no choice but to make drastic changes.
The chart below shows that most people plan to get quotes or switch insurance companies for lower rates, which is an excellent first course of action. If your commute is short or you work from home, paying per mile for insurance may be another great option. Your credit score counts, and keeping a good score can reduce your rates.
You may opt to increase your comprehensive and collision deductibles, but be aware that you will have to pay more if you have a claim, so the savings might not be as much as you think.
The least favorable options are canceling your policy, reducing coverage limits, and carrying only the state minimum coverage. If you get into an accident, you could pay huge sums for property damage and medical payments to others.
A car insurance company may suggest you install a telematics device that measures your driving habits to lower your insurance. However, you could pay more than the initial rate once the insurance company gets the results. In fact, more than 40 percent of drivers reported an increase in their premiums after using a telematics option.3
Our research showed that a few drivers would lie to their insurers to lower their rates. Some would report driving less than they actually do, and others would lie about their address to get a lower rate. Insurance companies consider this fraud in either case. If you get caught, an insurance company can charge you the difference, cancel your policy, or pursue fraud charges against you. It’s not worth taking a chance to commit fraud. Honesty is the best policy when applying for car insurance.