Signs You Are Paying Too Much for Auto Insurance (2024)
There are three signs you are paying too much for auto insurance. You may ask yourself, "Why is my insurance so high?" By checking out offers from other auto insurance companies every six months, finding out what coverage you need, and making sure you are bundling, you can really save big. It’s surprising how simple it is to lower your car insurance costs.. Learn more here about how to save on your monthly expenses by decreasing your auto insurance bill.
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Justin Wright
Licensed Insurance Agent
Justin Wright has been a licensed insurance broker for over 9 years. After graduating from Southeastern Seminary with a Masters in Philosophy, Justin started his career as a professor, teaching Philosophy and Ethics. Later, Justin obtained both his Property & Casualty license and his Life and Health license and began working for State Farm and Allstate. In 2020, Justin began working as an i...
Licensed Insurance Agent
UPDATED: Nov 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Nov 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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Watching for the top three signs that you are paying too much for auto insurance can make it easy to add some padding to your budget. Let’s face it. We have all asked ourselves, “Do I have too much auto insurance coverage?” and “Why is my insurance so high?” (read our “How To Budget for Auto Insurance” for more information).
When you are trying to answer these questions, you want to look at the last time you compared car insurance companies’ prices.
Additionally, you should take the time to decide what type of auto insurance do you need. Lastly, check to see if you are with one of the best insurance companies for bundling home and auto insurance to find significant savings.
If you suspect you are paying too much for car insurance, shop around now. Enter your ZIP code to get free quotes from the best auto insurance companies.
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Three Signs You’re Paying Too Much For Auto Insurance
Keep in mind; there are many ways to decipher if your car insurance rates are too high. These three signs you are paying too much for auto insurance are some of the simplest ways to determine whether or not you have the best rates possible.
#1 – Check Out Other Auto Insurance Companies Every Six Months
If you find yourself wondering if you are paying too much for car insurance and you haven’t gotten any updated quotes in six months, the answer is probably yes. This is the first sign you are paying too much for auto insurance.
Read more: How often should I review and update my auto insurance coverage?
Checking out your policy’s features and rates can give you the first clue in knowing if you are paying too much for auto insurance. Checking other insurance companies’ rates when your policy is ready to renew is the easiest time to do it.
Staying up to date with what other auto insurance companies have to offer is one of the best ways to know if you’re paying too much for car insurance.
The simplest way to check out what a variety of companies have to offer is to slip your ZIP code into the box at the top or bottom of the page. This will give you fast information on rates from dozens of reputable auto insurance companies. In turn, you can find yourself saving hundreds of dollars.
Factors That Determine Your Auto Insurance Rates
Each insurer will factor in different items to determine what your specific rate is going to be. Knowing the most common elements can give you a clear idea of what will raise or lower your individual rates.
10 Contributing Factors for Car Insurance Rates:
- Age
- Yearly Mileage
- State Requirements
- Make and Model of Vehicle
- Violations
- Driving Record
- Credit History
- Marital Status
- Gender
- ZIP Code
Understand that these are only some of the critical items that will play into your current auto insurance rates. Additionally, each person’s situation will play a role in what they pay. Auto insurance is a very individualized thing.
If you have any blemishes on your driving record, less than perfect credit, a long commute, or live in a high crime area, your rates will go up. But auto insurance companies factor these things differently.
Your driving record is the biggest one. You can see in the table below how just one at-fault accident or DUI can affect how much you have to pay.
Average Annual Auto Insurance Rates By Driving Record
Companies Average Annual Rates with a Clean Record Average Annual Rates with One accident Average Annual Rates with One DUI Average Annual Rates with One Speeding Violation
$1,933.68 $2,516.24 $3,506.03 $2,193.25
$2,145.96 $3,192.77 $4,875.87 $2,645.43
$2,693.61 $3,722.75 $4,330.24 $3,025.74
$2,746.18 $3,396.95 $4,543.20 $3,113.68
$2,821.18 $3,396.01 $3,636.80 $3,186.01
$3,393.09 $4,777.04 $3,969.65 $4,002.28
$3,447.69 $4,289.74 $5,741.40 $4,260.80
$3,460.60 $4,518.73 $4,718.75 $4,079.01
$3,819.90 $4,987.68 $6,260.73 $4,483.51
$4,774.30 $6,204.78 $7,613.48 $5,701.26
With these significant insurers, you’ll pay anywhere from 17-127 percent more with one DUI. You can see how vital your record is, but this is also an excellent example of how different auto insurance companies will evaluate your risk profile differently.
#2 – What Type of Auto Insurance Coverage Do You Need?
Perhaps you own a classic car that you only drive for a few miles a year, and you are carrying the same coverage for it as your day-to-day vehicle.
If this is the case, it is a pretty clear sign that you are paying too much for auto insurance. So, you may ask yourself, “How much auto insurance coverage do I need?“
Getting to know the different types of coverage available will help ensure you are getting the best rates possible.
Average Annual and Monthly Auto Insurance Rates by Coverage Type
Coverage Types Average Annual Coverage Rates Estimated Monthly Coverage Rates
Liability Coverage $555 $46
Collision Coverage $326 $27
Comprehensive Coverage $148 $12
Full Coverage $1,030 $86
We hear terms for coverage like liability, collision, comprehensive, and full-coverage, but most of us don’t really understand what they all mean. Let’s look at a quick breakdown of each so that you will have a better idea of what you are getting into.
Liability:
Liability is essential coverage. It won’t cover you or your vehicle, but if you get in an accident that is your fault, it can save you from draining your bank account. The other parties’ medical and auto repair costs will be handled through your insurance instead of out-of-pocket.
The amount of liability coverage you carry is up to you. However, the more coverage you have, the safer you will be in terms of protecting your bank account. Most states have minimum liability coverage limits. But even if your state doesn’t, you should invest in a reasonable amount of coverage.
Collision:
Collision coverage is going to protect your car regardless of who is at fault for an accident. Whether you total your car or need simple repairs, collision auto insurance will make sure the expense doesn’t come out of your pocket.
Comprehensive:
Comprehensive auto insurance is going to cover any damage done to your vehicle not relating to a collision. When you hit a deer, a tree branch falls on your car, or hail cracks your windshield, comprehensive car insurance will take care of the bill.
Full-Coverage:
Full-coverage is a term we don’t see as often because it is vast. Basically, full-coverage insurance is going to combine all the other types of insurance. Therefore, you will be covered regardless of what situation you are facing with your vehicle.
#3 – Are You Bundling Insurance Policies?
If you aren’t bundling, it is a huge sign you are paying too much for car insurance.
Even if you think you are getting a great deal from your car insurance company, you could likely be saving more. Reaching out to your current provider and asking questions about bundling is a simple solution to help pad your monthly budget.
I can tell you from personal experience that when I bundled my home and auto policies, it saved me a great deal of money. In fact, it can save you up to 25 percent in premium costs.
What can I save on my auto insurance?
You can see in the table below the availability of some of the most common auto insurance discounts.
Commonly Available Auto Insurance Discounts by Company
Discount Name Allstate American Family Farmers Geico Liberty Mutual Nationwide Progressive State Farm Travelers USAA
Adaptive Cruise Control ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓ ✓
Adaptive Headlights ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓ ✓
Anti-lock Brakes 10% ✓ ✓ 5% 5% 5% ✓ 5%
Anti-Theft 10% ✓ 23% 20% 25% ✓ 15%
Claim Free 35% ✓ ✓ 26% ✓ 10% ✓ 15% 23% 12%
Continuous Coverage ✓ ✓ ✓ ✓ ✓ ✓ 15% ✓
Daytime Running Lights 2% ✓ 3% 5% 5% ✓ ✓
Defensive Driver 10% 10% ✓ ✓ 10% 5% 10% 5% 10% 3%
Distant Student 35% ✓ ✓ ✓ ✓ 10% ✓ 7%
Driver's Ed 10% ✓ ✓ ✓ 10% ✓ 10% 15% 8% 3%
Driving Device/App 20% 40% ✓ ✓ 30% 40% 20% 50% 30% 5%
Early Signing 10% ✓ ✓ ✓ ✓ 8% ✓ ✓ 10% 12%
Electronic Stability Control 2% ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓
Emergency Deployment ✓ ✓ ✓ 25% ✓ ✓ ✓ ✓ ✓
Engaged Couple ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Family Legacy ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 10%
Family Plan ✓ ✓ ✓ ✓ ✓ 25% ✓ ✓ ✓ ✓
Farm Vehicle 10% ✓ ✓ ✓ ✓ ✓ ✓ ✓
Fast 5 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Federal Employee ✓ ✓ 12% 10% ✓ ✓ ✓ ✓
Forward Collision Warning ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓
Full Payment 10% ✓ ✓ $50 ✓ ✓ ✓ 8% ✓
Further Education ✓ ✓ 10% 15% ✓ ✓
Garaging/Storing ✓ ✓ ✓ ✓ ✓ ✓ ✓ 90%
Good Credit ✓ ✓ ✓ ✓ ✓ ✓
Good Student 20% ✓ 15% 23% 10% ✓ 25% 8% 3%
Green Vehicle 10% ✓ 5% ✓ 10% ✓ ✓ ✓ 10% ✓
Homeowner ✓ ✓ ✓ ✓ 5% ✓ 3% 5% ✓
Lane Departure Warning ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Life Insurance ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Low Mileage ✓ ✓ ✓ 30%
Loyalty ✓ ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓
Married ✓ ✓ ✓ ✓ ✓ ✓
Membership/Group ✓ ✓ ✓ 10% 7% ✓ ✓
Military ✓ ✓ 15% 4% ✓ ✓
Military Garaging ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 15%
Multiple Drivers ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Multiple Policies 10% 29% ✓ 10% 20% 10% 12% 17% 13%
Multiple Vehicles ✓ ✓ 25% 10% 20% 10% 20% 8%
New Address ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓ ✓
New Customer/New Plan ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
New Graduate ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓ ✓
New Vehicle 30% ✓ ✓ 15% ✓ 40% 10% 12%
Newly Licensed ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓ ✓
Newlyweds ✓ ✓ ✓ ✓ 5% ✓ ✓ ✓ ✓ ✓
Non-Smoker/Non-Drinker ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Occasional Operator ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Occupation ✓ 10% 15% ✓ ✓ ✓
On-Time Payments 5% ✓ ✓ ✓ ✓ ✓ ✓ 15% ✓
Online Shopper ✓ ✓ ✓ ✓ ✓ ✓ 7% ✓ ✓ ✓
Paperless Documents 10% ✓ ✓ ✓ 5% $50 ✓ ✓ ✓
Paperless/Auto Billing 5% ✓ ✓ ✓ $30 ✓ $20 3% 3%
Passive Restraint 30% 30% 40% 20% ✓ 40%
Recent Retirees ✓ ✓ ✓ ✓ 4% ✓ ✓ ✓ ✓ ✓
Renter ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Roadside Assistance ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Safe Driver 45% ✓ 15% ✓ 35% 31% 15% 23% 12%
Seat Belt Use ✓ ✓ ✓ 15% ✓ ✓ ✓ ✓ ✓
Senior Driver 10% ✓ ✓ ✓ ✓ ✓ ✓ ✓
Stable Residence ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Students & Alumni ✓ ✓ ✓ 10% 7% ✓ ✓ ✓
Switching Provider ✓ ✓ 10% ✓ ✓ ✓ ✓
Utility Vehicle 15% ✓ ✓ ✓ ✓ ✓ ✓ ✓
Vehicle Recovery 10% ✓ ✓ 15% 35% 25% ✓ 5%
VIN Etching ✓ ✓ ✓ ✓ 5% ✓ ✓
Volunteer ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Young Driver ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ $75
It would help if you also looked for hidden auto insurance discounts. Multi-policy and good driver discounts are not always disclosed. Finding those discounts will keep your bill in check and ensure you pay as little as possible for stellar auto insurance.
How much is too much for car insurance? The truth is that you’re probably paying more than you should. Shop around. Enter your ZIP code to get free quotes from multiple insurers.
Frequently Asked Questions
How can I tell if I am paying too much for auto insurance?
There are several signs that may indicate you are paying too much for auto insurance. These signs include:
- Your premium keeps increasing every year without any changes in your driving record or coverage.
- You have recently compared quotes from different insurance providers and found significantly lower rates for the same coverage.
- You have experienced major life changes, such as moving to a safer neighborhood or purchasing a new car, but your premium hasn’t decreased.
- Your current insurer doesn’t offer any discounts or incentives for safe driving habits or loyalty.
- You have a clean driving record with no accidents or tickets, yet your premium remains high.
How often should I review my auto insurance policy?
It is recommended to review your auto insurance policy at least once a year. However, certain life events may prompt the need for more frequent reviews. These events include purchasing a new car, moving to a new location, getting married, adding a teen driver to your policy, or experiencing any other significant changes that could impact your insurance needs. Regularly reviewing your policy allows you to ensure you have adequate coverage at a fair price and make any necessary adjustments to your policy.
Does a low premium always mean I have the best auto insurance?
Not necessarily. While a low premium can be appealing, it’s crucial to consider the coverage and customer service provided by the insurance company as well. The best auto insurance policy is one that provides adequate coverage at a competitive price and is backed by excellent customer support and a reliable claims process. When comparing policies, consider factors like coverage limits, deductibles, policy exclusions, and the insurer’s reputation for handling claims. It’s also helpful to read reviews and seek recommendations from trusted sources to gauge the overall customer experience with different insurance companies.
What should I do if I think I am paying too much for auto insurance?
If you suspect that you are paying too much for auto insurance, here are a few steps you can take:
- Compare quotes from multiple insurance providers: Obtain quotes from different insurers to see if you can find a better rate for the same coverage. Online comparison tools can be helpful in this process.
- Consider adjusting your coverage: Review your policy to determine if you have any unnecessary coverage or if you can increase your deductibles to reduce your premium.
- Check for discounts: Inquire with your current insurer or other providers about any available discounts you may be eligible for, such as safe driver discounts, multi-policy discounts, or discounts for certain professional affiliations.
- Consult with an insurance agent or broker: An insurance professional can provide guidance and help you navigate the process of finding more affordable coverage options.
How do I know if I’m paying too much for car insurance?
If you haven’t compared quotes from other insurers recently, it’s a sign you might be overpaying.
Am I overpaying for car insurance?
If you haven’t reviewed your policy or shopped around for better rates, you might be overpaying.
Am I paying too much for my car?
Your car’s value and your coverage level can affect your insurance costs. Reviewing your policy can help you determine if you’re paying too much.
Did I pay too much for my car?
Your car’s purchase price and insurance costs can vary. Comparing quotes from different insurers can help you determine if you paid too much.
How often do you pay for car insurance?
Car insurance premiums are typically paid monthly, semi-annually, or annually, depending on your policy and insurer.
What do most people pay for car insurance?
Car insurance costs vary widely depending on factors like location, age, and driving history. Comparing quotes can help you see what’s typical for your demographic.
What should I be paying for auto insurance?
Your auto insurance premiums should align with your coverage needs and budget. Shopping around can help you find the best rates.
What to do if your car insurance is too high?
If your premiums are too high, consider shopping around for better rates, adjusting your coverage, or exploring discounts.
When do I pay excess on car insurance?
Excess, or deductible, is the amount you pay out of pocket before your insurance coverage kicks in. You typically pay excess when filing a claim.
Who pays the most for car insurance?
Young drivers, drivers with poor credit or driving records, and those in high-risk areas typically pay the highest car insurance premiums.
Why am I paying so much for car insurance?
Factors like your driving history, location, and coverage level can affect your car insurance premiums. Shopping around can help you find better rates.
How much are you paying for car insurance?
Car insurance costs vary depending on factors like your age, location, and coverage needs. Comparing quotes can help you find the best rates.
Is $200 a lot for car insurance?
Car insurance costs vary widely depending on factors like your location, driving history, and coverage level. $200 could be high or low, depending on your circumstances.
Is my car insurance too high?
If your premiums exceed what’s typical for your demographic and coverage needs, your car insurance might be too high.
Is there any reason for the insurance amount to be high?
Yes, several factors can contribute to high insurance premiums, including your driving record, location, type of vehicle, coverage level, and insurance company’s risk assessment.
What is considered excess insurance?
Excess insurance, also known as deductible, is the amount you agree to pay out of pocket towards a claim before your insurance coverage kicks in.
What is the reason for excess in insurance?
Insurance excess helps insurers manage risk by sharing the cost of claims with policyholders. It also encourages responsible driving behavior and discourages frivolous claims.
Who pays the insurance excess?
The policyholder is responsible for paying the insurance excess when making a claim.
What does high excess mean in insurance?
A high excess means a larger amount that the policyholder must pay out of pocket before the insurance coverage starts to cover the remaining claim amount.
What are the benefits of excess insurance?
Excess insurance can help policyholders save on premiums by opting for a higher excess amount. It also encourages cautious driving and reduces the frequency of small claims.
What is the ideal insurance amount?
The ideal insurance amount varies depending on individual circumstances, including the value of the insured vehicle, personal financial situation, and risk tolerance.
What is the excess level of insurance?
The excess level of insurance refers to the predetermined amount that the policyholder agrees to pay towards a claim before the insurance coverage applies.
What happens if you over-insure?
If you over-insure, you may end up paying higher premiums for coverage you don’t need. It’s essential to assess your insurance needs accurately to avoid unnecessary expenses.
Is insurance excess refundable?
No, insurance excess is not refundable. It serves as your contribution towards a claim and is not reimbursed by the insurance company.
How do you calculate the insurance policy amount?
The insurance policy amount is calculated based on various factors, including the insured vehicle’s value, desired coverage level, deductible amount, and additional factors like driving record and location.
Do I pay my excess if I’m not at fault?
In some cases, if you’re not at fault for an accident and the responsible party’s insurance covers the claim, you may not have to pay the excess. However, it depends on your insurance policy terms and the specific circumstances of the incident.
Compare over 200 auto insurance companies at once!
Secured with SHA-256 Encryption
Justin Wright
Licensed Insurance Agent
Justin Wright has been a licensed insurance broker for over 9 years. After graduating from Southeastern Seminary with a Masters in Philosophy, Justin started his career as a professor, teaching Philosophy and Ethics. Later, Justin obtained both his Property & Casualty license and his Life and Health license and began working for State Farm and Allstate. In 2020, Justin began working as an i...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.