Managing the Costs of Your Auto Insurance: Steps to Take to Get the Best Deal and the Best Coverage

Like so many other goods and services we rely on, auto insurance in Massachusetts continues to increase in cost. Understanding what’s driving the costs up here and across the nation is important. Equally important, though, is learning what you can do to manage these increases while also maintaining coverage that best suits your situation.

Elements Leading to the Increasing Costs of Auto Insurance

The same inflation that has roiled the economy has clearly had an impact on the cost of auto insurance, but it isn’t the only culprit. According to a recent New York Times article, auto insurance has risen some 15 percent over the past year, an amount about two times greater than the rate of inflation, and it is expected to continue rising.

With the pandemic behind us, heavier traffic has returned to our streets and highways, and this return has also contributed to the rise in cost. Bad driving habits of the past, such as excess speed, careless driving, texting and driving, have re-emerged post-COVID, leading to an increase in the frequency and severity of auto accidents.

Meanwhile, repair costs are on the rise, and supply-chain issues, extending from pandemic days, still occasionally surface. Combined with labor shortages, these issues punch up prices. And innovations like on-board technology such as cameras and various sensors makes repairing accident damage even more expensive. The expense to repair electric vehicles can be especially steep because of their unique structure and elements.

Measures to Take to Manage the Rising Costs

Some of the steps to ensure that you get your money’s worth with your auto insurance are more a matter of long-term planning. For example, not all cars are created equal relative to the expense of insuring them. According to a recent review in MarketWatch Guides, you will generally find lower auto insurance rates for small SUVs and minivans versus large SUVs and sedans. Therefore, with your next auto purchase, consider selecting one that is cost- effective to insure.

A poor driving record can also have costly consequences. However, insurance companies can consider only a policyholder’s previous five years’ driving experience to price a policy. So, if you have had some problems in the past, building a safe driving record will pay off in lower premiums later.

For more immediate savings, however, you also have a number of options to counter the effects of rising insurance rates. For example, insurance companies offer a number of incentives to retain good clients, including

  • Discounts for drivers with clean driving records;
  • Premium credits for bundling auto policies with home, marine, or other types of policies with the same company;
  • Savings for insuring multiple cars on a single policy rather than separate policies;
  • Discounts for remitting payment in full at the beginning of the policy term and for opting to pay the premium and receive all paperwork electronically;
  • Discounts as a loyalty reward for remaining with the same company over a period of years or as a membership benefit with AAA or other organizations;
  • Discounts for new vehicles, likely because of their advanced safety features, and for cars that are driven low miles annually; and
  • Discounts for young drivers who have attended a certified safe-driving course as well as those who are earning good grades in school and for those living at school and driving on a limited basis.

At Benson, Young & Downs, we take the time to learn about you and your specific insurance needs. With this information, our knowledgeable team can help identify the discounts or credits for which you are eligible.

In addition, Massachusetts drivers can purchase up to eight optional coverages, including higher limits relative to property damage and bodily injuries, collision, bodily injury caused by an underinsured auto, and comprehensive protection for repairs resulting from theft, fire, and other perils. The Massachusetts Division of Insurance provides specific details about these optional coverages. The tricky part is choosing the optional coverages and the level of deductible that will provide the best protection for you, given your financial situation and the age and condition of your car.

For example, although optional coverage for towing in your policy may not be expensive, it can be eliminated if you are an AAA member. If you are driving an older car that no longer holds much blue book valuation, then maybe it is no longer reasonable to include collision coverage. The BY&D team can assist you with these decisions as well. And because of our extensive experience, we can offer guidance should you have questions about switching to another carrier to reduce costs.