If you’ve noticed your car insurance premium climbing higher every renewal cycle, you’re not alone. Across the U.S.—and especially in California—drivers are watching their auto insurance costs rise, even as their vehicles age and their driving records remain clean.
So why do premiums keep going up? And more importantly, what can you do about it?
Insurance expert and radio host Karl Susman of Insurance Hour recently broke down the real forces behind rising auto insurance rates—and shared practical ways drivers can take control of their costs without sacrificing protection.
Why Car Insurance Premiums Keep Going Up
At first glance, rising rates seem illogical. Your car depreciates every year, and if you’re accident-free, your individual risk should be lower. In fact, part of your premium often does go down over time.
“If you actually look at your policy line by line, the premium for your specific vehicle likely has gone down,” Susman explained. That’s because your car’s value is lower, reducing the insurer’s potential payout for a total loss.
But your total premium reflects much more than just your car’s value. Key cost drivers include:
- Inflation driving up labor and parts costs
- Advanced vehicle technology increasing repair complexity
- Larger, faster vehicles causing more expensive damage
- Higher accident frequency from distracted driving
- Rising medical costs for injury claims
Electric vehicles add another major layer of expense. “Fixing an EV can cost 20, 30, even 40% more than repairing a gas-powered car,” Susman noted. Those higher claim costs push premiums up for everyone.
In short, even if your personal risk improves, system-wide claim costs continue to rise.
How Driving Experience Really Affects Your Rate
Experience does help—up to a point. Young drivers pay the most because of higher accident rates and limited driving history. As years behind the wheel accumulate, liability rates typically decline.
But that trend doesn’t last forever. “There’s a sweet spot between roughly ages 35 and 55,” Susman explained. After that, premiums can rise again as accident frequency increases among older drivers due to slower reaction times and vision changes.
The Hidden Culprit: Distracted Driving
Few factors have driven insurance losses more than distracted driving.
“If you look over and see someone holding their phone up while driving, they’re not even close to looking forward,” Susman said. “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, distracted driving causes more than 3,000 deaths each year—and far more claims. A single at-fault accident or moving violation can raise premiums by 20–40% for three to five years.
Avoiding distractions is one of the most powerful ways to control your long-term insurance costs.
Shop for Insurance the Right Way
Shopping around is one of the fastest ways to save, but only if you compare policies properly.
“Don’t just say, ‘I want full coverage.’ That’s not a real insurance term,” Susman warned. You must compare identical coverage limits for liability, collision, comprehensive, uninsured motorist, and deductibles.
A lower price sometimes means thinner protection. Always confirm you’re getting equal or better coverage before switching carriers.
Bundle Policies for Built-In Savings
Multi-policy discounts are real and substantial. If your auto and home, renters, or condo insurance are with different companies, consolidating them can reduce premiums on both.
Most carriers offer 5–15% multi-policy discounts. Since the discount is a percentage, rising premiums actually make the savings larger in dollar terms.
“It’s not a flat-dollar discount,” Susman said. “As your premium increases, that percentage saves you more.”
Ask for Every Discount You Qualify For
Many discounts are not applied automatically. You have to request them. Common examples include:
- Good driver discounts
- Defensive driving course completion
- Good student discounts for young drivers
- Garage parking discounts
- Anti-theft and vehicle tracking discounts
“These are state-specific,” Susman emphasized. “Don’t assume you’re receiving everything you qualify for—ask directly.”
Reassess How You Use Your Vehicle
Your driving habits heavily influence your rate. A long daily commute or business use costs more to insure than occasional personal use.
If you now work from home, drive fewer miles, or no longer commute daily, update your insurer immediately. Lower annual mileage alone can materially reduce premiums.
Some carriers also offer pay-per-mile programs for low-mileage drivers, retirees, or remote workers.
Use Deductibles Strategically
Raising your collision or comprehensive deductible from $500 to $1,000 can reduce premiums by 10–20%.
But Susman cautions against using deductibles as a shortcut to savings. “Never raise your deductible just to lower your bill if you can’t afford to pay it when you need to.”
Only increase deductibles if you have sufficient emergency savings.
Review Coverage as Your Car Ages
As vehicles depreciate, comprehensive and collision coverage may no longer be cost-effective. Once a car’s market value drops to only a few thousand dollars, physical damage coverage might cost more than it’s worth.
Also remove unnecessary endorsements tied to old commuting or usage patterns. Insurance should evolve with your lifestyle.
Why Your State Has a Big Impact on Rates
Location is one of the biggest pricing variables in auto insurance.
Least expensive states include Maine, Vermont, New Hampshire, Hawaii, Idaho, North Carolina, and Iowa. The most expensive include Michigan, New Jersey, Florida, New York, and Louisiana.
Differences stem from accident rates, weather risk, fraud, litigation, and state insurance regulations. California’s regulatory system, for example, often leads to delayed rate adjustments and higher long-term pricing pressure.
The Most Powerful Savings Strategy: Drive Safely
No discount compares to clean driving. Accidents and violations are the single largest contributors to high premiums.
Even minor tickets can stay on your record for years. In many states, traffic school can prevent violations from impacting your insurance history.
“Don’t just pay the ticket. Go to traffic school,” Susman advised. “The long-term insurance cost is far more expensive than the fine itself.”
The Bottom Line
Auto insurance premiums are rising because the cost of claims is rising—driven by inflation, technology, distracted driving, and expensive repairs. While you can’t control every factor, you can control how you shop, bundle, and manage your coverage.
Review your policy regularly, ask for every possible discount, update your driving habits, and prioritize safe driving. As Susman put it, “The onus is really on you. Ask questions. Be proactive. You’re the one paying for it—make sure you’re getting full value.”
Smart driving and smart insurance habits remain the most effective tools for keeping your premiums under control.
