Survey says most Americans overpaying for car insurance: How to lower your rate now

Most drivers think they are paying a fair price for their car insurance, but experts disagree. (iStock)

Amid rising car insurance prices in 2021, nearly half of adult Americans think that their rates are fair or very fair. However, according to a new survey from YouGov for Forbes Advisor, some experts disagree.

Besides a sharp decrease in 2020 due to auto insurance companies offering refunds and credits to provide financial relief, car insurance rates have been rising steadily for decades, according to data from the U.S. Bureau of Labor Statistics. That’s because the prices of car repairs and medical costs have been driving up car insurance premiums.

But the survey also found that among drivers who felt auto insurance policy rates are unfair, about half have taken no action to reduce their auto insurance rates within the last 12 months.

"While about half of consumers believe that car insurance rates are fair, the idea of fairness tends to fall apart when people are asked specifically about the fairness of specific pricing factors, such as the use of credit," said Amy Danise, Forbes Advisor chief insurance analyst. "This may be because consumers generally aren’t aware of the factors used in car insurance pricing."

If you want to see how your auto insurance prices compare or view options for cheap car insurance, visit Credible to see personalized offers from multiple auto insurance providers at once.


3 ways to lower your car insurance rate

Drivers learned, according to the survey, that a variety of factors typically contribute to your car insurance rate. These include your age, driving record, credit score, where you live and more. Respondents of the survey substantially agreed that some of the factors unrelated to operating a vehicle (occupation, age) should not factor into the pricing of their car insurance.

If you find yourself looking for ways to lower your insurance bill, it will require some action. Consider the following three factors to help you lower your insurance costs:

  1. Improving your credit score
  2. Changing your current policy
  3. Shopping around for better rates

1. Improving your credit score:

When looking at the specifics, 69% of Americans didn’t like the utilization one's credit score in determining premium payments, according to the survey. In some states, your credit score can help you get a better rate, so improving it can work to your benefit when it comes to car insurance.

This is true for every state except California, Hawaii, Maryland, Massachusetts, Michigan, Oregon and Utah, which prohibit or regulate the use of credit scores by auto insurance carriers, according to Andrew Latham, managing editor at SuperMoney, a financial services comparison site.

2. Changing your current policy

If the previously mentioned factors for a driver change, they may need to change the auto insurance company as a result. One company that may have offered the most favorable rates before may not have the best rates for a driver's new profile.

"People may not realize that the company that offered them a great rate a few years ago no longer has competitive pricing for them," Danise said. "As driving records, credit and discount availability change, the cheapest companies for a particular person also change."

Because car insurance providers measure factors differently, one that can offer a fair price to one driver may not have the best rates for another. Visit Credible to see multiple offers at once from different car insurance companies nationwide and determine which auto insurance quote is the best fit for you.


3. Shopping around for better rates

Because your credit score, driving history and a variety of other factors influence your premium rates, it’s a good idea to shop through various car insurance coverage providers to ensure you’re always getting the best coverage available.

"We can’t expect consumers to be aware of all reasons they may be overpaying for car insurance," Danise said. "People have other things to do, after all. But shopping for new car insurance quotes every few years could really be an eye-opener for many people."

Visit Credible to compare multiple providers at once and find affordable car insurance with personalized quotes for you in minutes. You can find cheap auto insurance and compare rates, deductibles, car insurance discounts and other coverage options.


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