How to Lower Your Car Insurance Premiums

Common reasons for high car insurance costs include your driving record, age, coverage options, where you live, the car you drive, your credit history or not taking advantage of discounts. The average car insurance premium has also become more expensive as it increased by more than 50% in the past 10 years.

8 Reasons Why Your Car Insurance Is So Expensive

1. You Have a Poor Driving Record

Your driving record is probably the most important factor in determining your car insurance rates. If your record is poor, with accidents and driving violations, and you have a history of claims, your rates will be high. You will also pay more than average if you're bad with credit, young (especially young and male), or unmarried.

2. Your Vehicle Is Expensive to Insure

Insurance companies like safe, boring cars that nobody wants to steal for joy-riding or parts. If you choose to drive something large, fast, luxurious, statistically unsafe on the road, or popular with thieves, you will pay more.

3. You Live in a High-Risk Location

Where you live has a large impact on your premiums. Some areas of the country have much higher insurance costs than others. A number of factors go into this, such as the history of accidents in the area, population density, the number of uninsured drivers, crime statistics, bad weather patterns, etc. Also, if you live far from work and have a long daily commute, the high annual mileage could raise your rate.

4. You Have High Coverage Amounts

If your coverage limits are high and your deductibles are low, you will be happy if you need to make a claim, but not as happy when you're paying your premiums. If the insurance company risks having to pay out more in the future, you will have to pay more now.

5. You Are Not Taking Advantage of Discounts

Insurers offer a very wide variety of discounts. Valued customer discounts offer savings for things like loyalty, multiple cars and policies, and paying online. Driver discounts may apply if you are a good driver, good student, belong to a certain profession or organization, are married, or more. Your car may also qualify for a discount if it has equipment that makes it safer to drive or harder to steal. Discounts are available to nearly everyone, and you may qualify for some that you aren't getting credit for yet.

6. You Are Too Young or Too Old

Teens are statistically more likely to cause car accidents than the average driver, so insurance companies charge them the highest premiums. Drivers who get their license at 16 years old usually see their premiums decrease with every year of experience, however, and age 25 is generally considered a turning point when premiums become considerably lower.

Experienced drivers in their 40s and 50s are often the cheapest to insure. But rates begin to rise again after age 65.

7. You Have a Low Insurance Score

Every major insurance company uses a credit-based insurance score to calculate premiums where allowed by law. Like credit scores, insurance scores are based on credit report information, only they are used to predict a driver's likelihood of filing a claim. The rationale is that individuals who are careful with their money tend to be careful drivers, too.

However, insurance scores are controversial, so they are banned in Massachusetts, Hawaii, and California. Most other states also have restrictions on their use, which can be found on the state insurance regulator's website.

8. Costs Increasing Overall

Record-setting natural disasters, more phone-related car accidents, high rates of insurance fraud, and expensive-to-repair car technology have all increased costs for insurance companies. As a result, insurers have been raising their prices to cover their expenses.

From 2010 to 2019, the average cost of car insurance increased by more than 50%. Prices have gone up every year. This steady rise in insurance costs has outstripped other consumer costs. Even skyrocketing hospital costs lag slightly behind car insurance.

Overall Cost Increases from 2010 to 2019

• Car Insurance: 52.2%
• Hospital Services: 49.1%
• Cost of Living: 17.2%
• Physician's Fees: 15.7%

You can't reverse this industry-wide inflation. But if you want to lower your own insurance costs, address as many of your personal factors as you can. Then get quotes from multiple insurance companies and compare.

Check out WalletHub's full guide on the factors that affect car insurance rates for more information.

There are many reasons your car insurance can go up. If your auto insurance premium went up at renewal time, it may be because you caused an accident, earned a ticket, switched cars, added a teenage driver to your policy or increased your coverage. Even moving a short distance or paying a few credit card bills late can raise your car insurance cost. Your rate may also have been affected by widespread changes beyond your control—in economics, weather, crime and accident statistics, vehicle technology, new laws, medical costs, or your insurer's profit margin.

Top 10 Reasons Your Car Insurance Can Go Up:

1. You increased your riskiness, in the eyes of your insurance company

This happens when you cause an accident, get a ticket for a moving violation, or add a riskier driver like a teenager to your policy.

2. You increased your coverage

Maybe you realized you didn't have enough protection for your peace of mind, in case of an accident. Higher limits or lower deductibles equal higher premiums.

3. You changed cars

Perhaps you traded an older model for a newer one that raised your rate for collision and comprehensive insurance. Rates will also rise if you trade a safe, practical vehicle for something more expensive, faster, or with special modifications.

4. You moved

If you move into a zone with more population density, a higher theft rate or more insurance claims, your rates can rise. Moving a few blocks can cost as much as 64%, according to some studies. Moving from a small town to a metropolitan area can cost much more—from 300% to 800%.

5. Your credit score fell

Most insurers use credit history in setting rates. If your rating falls from excellent to poor, your premium could as much as double in some states.

6. The economy is stronger

This is a good thing except when it comes to insurance costs. More people working means more drivers on the road, going more places. This raises risk and rates across the country.

7. Medical costs are rising

From 2012 to 2017, bodily injury liability claims increased in cost by 10% per year.

8. Repair costs are rising

Prices for motor vehicle repairs were 61% higher in 2017 than they were in 2000, according to the U.S. Bureau of Labor Statistics. New safety features, with their many sensors and computer chips, are expensive to fix.

9. Cell phones are distracting

At least nine Americans die and 100 are injured in distracted driving crashes every day, according to the National Safety Council. And 1 in 4 car accidents in the U.S. is now caused by texting and driving. Accident rates due to distracted driving are increasing year by year.

10. Marijuana is being legalized in more states

Accidents rose up to 6% in states with legalized recreational marijuana between 2012 and 2017, compared to neighboring states where it remained illegal, according to the Insurance Institute for Highway Safety.

Many of these issues affect your rates because they affect the bottom line of your insurance company. When your insurer isn't making enough money to cover the cost of claims, they have to raise prices. However, the effects aren't equal on all insurers. If your car insurance has gone up, it's important to comparison shop for a company that can offer you the lowest rates.

You can lower your Allstate car insurance costs by taking advantage of Allstate discounts, opting for a higher deductible, and reducing your coverage, among other things. Allstate considers a variety of factors when calculating your premium, though some – like your age and location – are out of your control. Fortunately, you can take steps to influence other factors in order to lower your rate.

How to Lower the Cost of Car Insurance from Allstate

Use Allstate's auto insurance discounts

Allstate offers a wide variety of discounts that can help you lower your overall car insurance bill. For example, drivers can get a discount of up to 20% if their policy covers a college or high school student who maintains at least a "B-" average. Or you can save up to 25% on your premium if you have multiple policies with Allstate.

Raise your car insurance deductible

Opting for a higher deductible on any of your insurance policies from Allstate can lower your premium. But if you decide to go this route, it's important that you choose a deductible amount that you can still afford if you suddenly need to file a claim. Otherwise, you might not be able to use the coverage that you have.

Reduce your car insurance coverage

Most states require a certain amount of bodily injury liability and property damage liability coverage. But there are other coverage options (like comprehensive, collision, personal injury protection, and uninsured motorist) that you may not have to purchase, depending on your state. Less coverage usually means lower premiums, but it could also lead to higher costs in the long run, so it's important to approach coverage decisions with caution.

Improve your driving record

Practicing safe driving habits and avoiding moving violations can help you qualify for lower Allstate insurance rates long-term. You may also be able to attend traffic school in order to remove a violation or points from your record, depending on your state. 

Build and improve your credit

Because your credit history is correlated with your likelihood of filing an insurance claim, Allstate uses your credit data to calculate your premium in states where it is legal. As a result, having good credit makes you less of an insurance risk, which will reduce your rates over time.

Drive less

Whether you can shorten your commute to work, use more public transportation, or even ride a bicycle more, driving fewer miles each year could lower your Allstate premium.

Drive an insurance-friendly car

Expensive cars, sports cars, and cars with high rates of theft are considered to be riskier to insure than cheaper, more practical vehicles. Before you buy a new car, get a new quote from Allstate to see how it will affect your rate. If the cost is out of your budget, then you should probably choose a different car.

Sign up for Drivewise

Drivewise, the Allstate telematics program rewards you for good driving with a discounted premium. Specifically, Drivewise tracks acceleration, braking, and the time of day that you drive. By using Drivewise, drivers can save 10% on their premium just for signing up and earn a rebate of up to 25% every six months.

Finally, if you're still struggling to afford your Allstate policy, you should consider switching insurers. Even if you're not actively looking for a new policy, it's generally a good idea to compare quotes from three different companies every 6-12 months. To learn more, check out WalletHub's guide to switching car insurance companies.

You can lower your Geico car insurance costs by taking advantage of Geico discounts, opting for a higher deductible, and reducing your coverage, among other things. Geico considers a variety of factors when calculating your premium, though some – like your age and location – are out of your control. Fortunately, you can take steps to influence other factors in order to lower your rate.

How to Lower the Cost of Car Insurance from Geico

Use Geico's auto insurance discounts

Geico offers a wide variety of discounts that can help you lower your overall car insurance bill. For example, drivers can get a discount of up to 15% if they insure a car that's three years old or younger. Or you can save up to 25% on your premium if you insure more than one car with Geico.

Raise your car insurance deductible

Opting for a higher deductible on any of your insurance policies from Geico can lower your premium. But if you decide to go this route, it's important that you choose a deductible amount that you can still afford if you suddenly need to file a claim. Otherwise, you might not be able to use the coverage that you have.

Reduce your car insurance coverage

Most states require a certain amount of bodily injury liability and property damage liability coverage. But there are other coverage options (like comprehensive, collision, personal injury protection, and uninsured motorist) that you may not have to purchase, depending on your state. Less coverage usually means lower premiums, but it could also lead to higher costs in the long run, so it's important to approach coverage decisions with caution.

Improve your driving record

Practicing safe driving habits and avoiding moving violations can help you qualify for lower Geico insurance rates long-term. You may also be able to attend traffic school in order to remove a violation or points from your record, depending on your state. Geico even offers a maximum 15% discount to drivers who take an approved defensive driving course.

Build and improve your credit

Because your credit history is correlated with your likelihood of filing an insurance claim, Geico uses your credit data to calculate your premium in states where it is legal. As a result, having good credit makes you less of an insurance risk, which will reduce your rates over time.

Drive less

Whether you can shorten your commute to work, use more public transportation, or even ride a bicycle more, driving fewer miles each year could lower your Geico premium.

Drive an insurance-friendly car

Expensive cars, sports cars, and cars with high rates of theft are considered to be riskier to insure than cheaper, more practical vehicles. Before you buy a new car, get a new quote from Geico to see how it will affect your rate. If the cost is out of your budget, then you should probably choose a different car.

Sign up for DriveEasy

DriveEasy, the Geico telematics program rewards you for good driving with a discounted premium. Specifically, DriveEasy tracks distracted driving, hard braking, cornering, smoothness, road type, distance driven, weather, speed, and the time of day that you drive. By using DriveEasy, drivers can save up to 25% on their rate.

Finally, if you're still struggling to afford your Geico policy, you should consider switching insurers. Even if you're not actively looking for a new policy, it's generally a good idea to compare quotes from three different companies every 6-12 months. To learn more, check out WalletHub's guide to switching car insurance companies.

You can lower your Progressive car insurance costs by taking advantage of Progressive discounts, opting for a higher deductible, and reducing your coverage, among other things. Progressive considers a variety of factors when calculating your premium, though some – like your age and location – are out of your control. Fortunately, you can take steps to influence other factors in order to lower your rate.

How to Lower the Cost of Car Insurance from Progressive

Use Progressive's auto insurance discounts

Progressive offers a wide variety of discounts that can help you lower your overall car insurance bill. For example, drivers can get a discount of up to 5% if they have two or more policies with Progressive. Or you can save an average of 10% on your premium if you add a full-time student on your policy who maintains a "B" average or better.

Raise your car insurance deductible

Opting for a higher deductible on any of your insurance policies from Progressive can lower your premium. But if you decide to go this route, it's important that you choose a deductible amount that you can still afford if you suddenly need to file a claim. Otherwise, you might not be able to use the coverage that you have.

Reduce your car insurance coverage

Most states require a certain amount of bodily injury liability and property damage liability coverage. But there are other coverage options (like comprehensive, collision, personal injury protection, and uninsured motorist) that you may not have to purchase, depending on your state. Less coverage usually means lower premiums, but it could also lead to higher costs in the long run, so it's important to approach coverage decisions with caution.

Improve your driving record

Practicing safe driving habits and avoiding moving violations can help you qualify for lower Progressive insurance rates long-term. You may also be able to attend traffic school in order to remove a violation or points from your record, depending on your state.

Build and improve your credit

Because your credit history is correlated with your likelihood of filing an insurance claim, Progressive uses your credit data to calculate your premium in states where it is legal. As a result, having good credit makes you less of an insurance risk, which will reduce your rates over time.

Drive less

Whether you can shorten your commute to work, use more public transportation, or even ride a bicycle more, driving fewer miles each year could lower your Progressive premium.

Drive an insurance-friendly car

Expensive cars, sports cars, and cars with high rates of theft are considered to be riskier to insure than cheaper, more practical vehicles. Before you buy a new car, get a new quote from Progressive to see how it will affect your rate. If the cost is out of your budget, then you should probably choose a different car.

Sign up for Snapshot

Snapshot, the Progressive telematics program rewards you for good driving with a discounted premium. Specifically, Snapshot tracks miles driven, acceleration, braking, the time of day that you drive, and distracted driving. By using Snapshot, drivers can save an average of $146 on their rate.

Finally, if you're still struggling to afford your Progressive policy, you should consider switching insurers. Even if you're not actively looking for a new policy, it's generally a good idea to compare quotes from three different companies every 6-12 months. To learn more, check out WalletHub's guide to switching car insurance companies.

No, you cannot negotiate car insurance rates because the industry and prices are heavily regulated by each state. An insurance company can't change its range of rates, once it is approved, without a new state review and evidence that the change is financially necessary. If your insurance company gave you a significantly different rate from the first one it quoted you, the insurer could face large fines or lose its insurance license.

Although you can't negotiate insurance rates, you can strategically negotiate the insurance shopping experience to get the lowest price possible for the coverage you need. While every insurer's rates are approved by the state, they aren't all the same. Comparing car insurance quotes from multiple companies is one of the most important strategies for finding the best deal. Taking full advantage of discounts is another. Discounts don't change the base rates; they offer a percentage off the total premium. Companies often have many discounts that you may not know about. For example, GEICO has affiliation discounts for belonging to, or working for, more than 800 organizations. It is worth a call to a customer service representative to see if there's a discount or two that could help lower your premium.

You also have the options of lowering your coverage or raising your deductibles to get your premiums down. You must have the minimum coverage mandated by your state, but anything above that is your decision. Think carefully about what you need. If you have an older car, for example, you may not even need collision/comprehensive coverage. Also consider your deductibles carefully. Raising them can reduce your premium, but you don't want to make them so high that you can't afford to pay them in case of a claim.

The best way to lower your teenager's car insurance rate is to add them to your existing insurance policy if they currently have their own and then look for discounts to further lower the cost. Other notable ways to lower the cost of teenage car insurance include reducing your teen's coverage and getting multiple quotes.

Teen drivers typically pay more for car insurance than mature drivers because insurers consider them high-risk. Rates don't usually drop until age 25, unless you intervene with these strategies.

Four Ways To Lower Teenage Car Insurance Costs

Add your teen to an existing policy

Sharing an insurance policy with a teen driver is usually the most cost-effective option for a family. For example, car insurance for a 16-year-old with their own policy costs an average of $3,343 per year. By comparison, adding a teen to an existing policy raises the premium by about $1,400, on average.

Look for applicable discounts

Most major insurers offer several discounts designed to help lower the cost of insuring a teen driver. The two most common types of discounts that apply specifically to teens are good student discounts and resident student discounts. Good student discounts apply to high school or college students who maintain a certain GPA, while a resident student discount reduces premiums for college students who go to school more than 100 miles away from their vehicle.

Teens can still qualify for some general discounts, too. For example, they may be able to receive a discount if they take an approved defensive driving course or stay accident-free for a certain period of time.

Reduce coverage

Considering how expensive car insurance is for young drivers, your teen could save on their premium by limiting the amount of coverage they include on their policy. However, they still need to be in compliance with state law and avoid driving uninsured.

Get multiple quotes

The best way to lower teen car insurance is to shop around for quotes from at least three different providers, especially if your teenager is getting their own policy. Every insurer uses their own methods to calculate premiums, so the rate that you get from one company might not be the same as another. As a result, simply shopping around could save a teen driver hundreds of dollars per year on car insurance.

To find out where to start, check out WalletHub's picks for the best teen car insurance companies. You can also find more information in our guide on how to lower car insurance costs.

It takes 3 to 5 years for car insurance to go down after an at-fault accident in most cases. Three years is a common penalty period for property damage claims. Insurance companies penalize drivers longer for accidents causing serious bodily harm or resulting from reckless or intoxicated driving. Premium increases vary widely by state and insurer, but the average increase is 41% after a single claim of $2,000 or more.

Rates increase after an at-fault accident both to pay for the fees associated with filing a claim and to compensate the insurer for taking a higher risk. Drivers who have caused one accident are statistically more likely to be involved in another one.

Of course, if you pay for a policy with “accident forgiveness,” your rates won't be raised for your first at-fault accident. Even without accident forgiveness, some insurance companies may give you a pass if it's your first auto accident on a spotless driving record. Also, minor fender benders with less than $2,000 in damage may not trigger rate hikes.

However, no matter how minor your accidents are, if you have more than one within 6 years, or you have a combination of tickets and claims within 2-3 years, you are likely to face higher rates. Sometimes, it's cheaper to pay for minor accident damage out of your pocket than to file a claim and trigger a rate increase.

Unfortunately, even if the accident you're involved in isn't your fault, you may find your insurance premium going up if you make a claim. This practice is prohibited by some states, but a study by the Consumer Federation of America found that most drivers who have made claims for not-at-fault accidents experienced rate increases of 8%-12%. For the insurance company, how much you've cost them is the most important consideration.

If age or inexperience, rather than accidents or violations, are the cause of your high premiums, you should see some decrease each year. If you're a young driver, the biggest drop will come when you turn 25. If you are an older new driver, the largest decrease will come when you have five years of safe driving behind you.

You should lower your car insurance coverage when you can no longer afford your current rate or you no longer need certain types of insurance, like collision or comprehensive. As long as you are still satisfying your state's minimum insurance requirements, you can reduce your limits or drop extra coverage altogether. But before you lower your car insurance, you should weigh the benefits of a lower premium against the loss of protection.

Rules & Regulations to Consider

In most states, you're allowed to have liability-only insurance, which just covers other people's expenses in accidents that you cause. However, several states require drivers to have additional types of coverage such as personal injury protection or uninsured/underinsured motorist.

If your car is leased or financed, your lender or lessor likely requires you to have collision and comprehensive coverage, too. You won't be able to drop either without violating your contract.

Other Ways to Save on Car Insurance

If reducing your coverage limits or dropping coverage isn't an option for you, then there are other ways to lower your rate. For example, you should consider raising your deductible for a cheaper premium, as long as you can afford the new amount. You may also want to think about switching to another insurer who can give you the same amount of coverage for a lower price. 

To learn more, check out WalletHub's guide for how to lower your car insurance.

The cost of car insurance typically goes down the most between the ages of 18 and 19, when rates drop by about 25% on average. Car insurance premiums generally continue to go down each year until age 25, when rates begin to level off for the next few decades. When drivers turn 25 years old, they can expect a discount of about 14%.

When Car Insurance Rates Go Down the Most

Note: The table above shows average annual rates for minimum coverage across all 50 states.

Around middle age, rates may begin to creep back up. This is because middle-aged drivers tend to insure newer, nicer cars and begin to add their children to the policy, increasing the average rate for this age range overall. Individual rates also start to go up again between the ages of 65 and 75 because senior drivers have a higher risk of accidents than middle-aged drivers.

Why Age Affects Car Insurance

Age affects car insurance rates because it's an indicator of a driver's risk to an insurance company. Young drivers are statistically more likely to get into a car accident than older, more experienced drivers. As a result, they're considered high-risk and are more expensive to insure.

The risk for the insurer and the cost for the insured then generally decline as drivers age and gain experience. Once drivers pass the age of 65, however, their risk starts to go up again. Not only are senior drivers more likely to get into an accident than middle-aged drivers, but they're also more likely to be injured as a result.

States Where Age Does Not Affect Rates

Although most people in the U.S. will find their prices change according to this timeline, there are a few states in which insurers can't use age to determine your rate. In California, Hawaii, and Massachusetts, age won't have a direct effect on how much you pay for car insurance. Other factors will still have an impact, though. Your driving record, credit score, and marital status can all affect your final premium.