Steering Through Costs: Smart Ways to Reduce Your Auto Insurance Premiums

If you’ve noticed your car insurance premium climbing higher every renewal cycle, you’re not alone. Across the U.S.—and particularly in California—drivers are watching their auto insurance costs rise, even when their cars are getting older and their driving records cleaner.

So why do premiums keep going up? And more importantly, what can you do about it?

Insurance expert and radio host Karl Susman, from Insurance Hour, recently broke down this topic in detail—explaining not only why rates are increasing, but also how drivers can take control of their insurance costs without sacrificing protection.

Here’s a breakdown of his insights and actionable steps every policyholder should know.

Why Car Insurance Costs Keep Rising

At first glance, it doesn’t make sense. Your car is getting older and worth less. You’ve been driving for years without accidents. Shouldn’t your rate be going down?

Technically, parts of it are.

According to Susman, “If you actually look at your insurance policy line by line, the premium for your specific vehicle likely has gone down over time.” That’s because your car’s value depreciates, reducing the insurer’s potential payout in case of a total loss.

However, the total premium—what you pay overall—reflects far more than just the value of your vehicle. It’s affected by a web of factors, including:

Inflation: Rising costs of parts, labor, and repairs.
Vehicle technology: Advanced electronics and sensors make modern cars more expensive to fix.
Driving trends: Bigger, faster vehicles cause more costly damage in crashes.
Accident frequency: Distracted driving has dramatically increased collision rates.
Medical expenses: Injury claims are costlier now than ever.

And then there’s the elephant in the garage—electric vehicles (EVs).

While EVs are environmentally friendly, they’re notoriously expensive to repair. “Fixing an EV can cost 20, 30, even 40% more than repairing a gas-powered car,” Susman explained. “That drives up costs across the board.”

In short, even if your individual risk decreases, the system-wide cost of claims keeps pushing premiums higher for everyone.

How Your Driving Experience Affects Rates

Driving experience does help—but only to a point.

Younger drivers with limited experience and more frequent accidents pay the most. As you accumulate years behind the wheel, your liability rates tend to drop.

However, Susman pointed out an interesting curve: “There’s a sweet spot between roughly ages 35 and 55 where drivers statistically perform best. After that, rates can start to creep up again as accident frequency increases among older drivers.”

In other words, experience helps—until other factors, like slower reflexes or reduced visibility, begin to offset it.

The Hidden Culprit: Distracted Driving

Few factors have reshaped auto insurance risk like distracted driving.

Susman’s description is striking:

“If you look over and see someone holding their phone up while driving, they’re not even close to looking forward. When you glance down to text, your car can travel the length of a football field before you look up again.”

According to the National Highway Traffic Safety Administration (NHTSA), distracted driving is now responsible for more than 3,000 deaths a year, and insurers are paying the price through higher claims frequency.

The bottom line: put the phone away. Avoiding distractions not only saves lives—it saves money. A single at-fault accident or moving violation can raise premiums by 20–40% for three to five years.

What You Can Control: Real Strategies to Cut Costs

While many cost drivers are beyond your control, there’s still a lot you can do. Susman outlined several practical, proven strategies:

1. Shop Around—But Compare Apples to Apples

One of the easiest ways to save money is by shopping around. Different carriers weigh risk factors differently, and prices can vary dramatically between companies.

However, Susman cautions:

“Don’t just say, ‘I want full coverage.’ That’s not a real insurance term. Make sure you’re comparing identical coverage limits—liability, collision, comprehensive, uninsured motorist, and deductibles.”

Lower prices can sometimes mean reduced coverage. Always verify that your new policy provides equivalent or better protection before switching.

2. Bundle Your Policies

“Bundle and save” isn’t just an ad slogan—it’s a real, long-standing discount strategy.

If your auto and home (or renters or condo) insurance are with different companies, consider consolidating them. Most carriers offer multi-policy discounts, which can lower both premiums by 5–15% each.

As Susman noted, “It’s not a flat dollar discount—it’s a percentage. So now that your auto policy costs more, that percentage actually saves you more.”

3. Ask for Hidden Discounts

Many discounts aren’t automatic. You need to ask for them. Examples include:

Good driver discount: No tickets or at-fault accidents for 3–5 years.
Defensive driving course: Completing a certified course can lower rates by 5–10%.
Good student discount: For young drivers maintaining a GPA above a certain level.
Garage parking: Vehicles kept in garages often qualify for lower risk ratings.
Anti-theft or tracking systems: Cars with alarms or GPS recovery systems may receive rate reductions.

“These are state-specific,” Susman emphasized, “so don’t assume you’re automatically getting everything you qualify for. Ask your agent directly.”

4. Reassess How You Use Your Car

Your usage type affects your premium. A vehicle rated for long commutes or business use costs more to insure than one driven occasionally.

If you now work from home or drive less than you used to, notify your insurer. Updating your annual mileage and commute distance could result in substantial savings.

Some companies also offer pay-per-mile policies, where you only pay for what you drive—ideal for retirees or remote workers.

5. Adjust Your Deductibles Wisely

Raising your collision or comprehensive deductible from $500 to $1,000 can cut premiums by 10–20%.

However, this only makes sense if you have enough savings to cover the higher out-of-pocket cost in case of a claim. As Susman advises, “Never raise your deductible just to lower your bill if you can’t afford to pay it when you need to.”

6. Review Your Coverage Regularly

Life changes—your insurance should too.

If you’re no longer carpooling, commuting daily, or driving long distances, update your policy. Remove unnecessary endorsements, like coverage for accessories or carpool surcharges.

Likewise, check whether your comprehensive and collision coverage still make sense for older cars. Once your vehicle’s market value drops below a few thousand dollars, it may not be worth insuring it for physical damage.

State-by-State Costs: Why Location Matters

Insurance rates vary dramatically across the U.S. In his broadcast, Susman shared some surprising statistics:

Least expensive states: Maine, Vermont, New Hampshire, Hawaii, Idaho, North Carolina, and Iowa.
Most expensive states: Michigan, New Jersey, Florida, New York—and at the top, Louisiana.

The difference between the cheapest and most expensive states can be four to five times the cost. Factors include local traffic patterns, accident rates, weather, fraud, litigation, and—most importantly—each state’s insurance regulations.

California, for example, restricts how insurers calculate rates, often leading to delayed adjustments and higher overall premiums.

The Ultimate Savings Tip: Drive Safely

All the discounts and bundles in the world can’t beat one fundamental truth: Safe driving saves money.

Accidents and moving violations are the single biggest contributors to high premiums. Even a minor speeding ticket can stay on your record for years, driving up rates long after you’ve paid the fine.

In most states, attending traffic school can keep a violation from appearing on your record—saving hundreds in future premiums.

As Susman puts it:

“Don’t just pay the ticket. Go to traffic school. The cost of that ticket on your insurance will be far more expensive than the fine itself.”

Looking Ahead: Knowledge Is the Best Policy

Auto insurance will likely continue to get more expensive as vehicles become more advanced and repairs more complex. But understanding how policies are priced—and staying proactive about your options—can help you stay ahead of the curve.

Susman’s message throughout the Insurance Hour episode was clear:

“The onus is really on you. Ask questions. Understand your policy. Be proactive. You’re the one paying for it—make sure you’re getting every bit of value you can.”

Final Thoughts

In today’s fast-changing insurance landscape, drivers who engage, compare, and communicate with their insurers are the ones who save.

So, review your policy, ask about discounts, update your driving details, and—most importantly—stay safe on the road. Because when it comes to lowering your premium, smart driving and smart insurance habits go hand in hand.

< Older Post

Newer Post >