Fed Up With Their Car-Insurance Bills, Drivers Shift Gears

Fed Up With Their Car-Insurance Bills, Drivers Shift Gears Drivers across the United States are no longer willing to passively accept the increasing costs of car insurance. The latest data shows a significant shift in consumer behavior as more individuals are actively seeking ways to lower their insurance expenses. Research from J.D. Power reveals that half of U.S. auto-insurance customers have taken the initiative to shop for a new policy in the past year, a notable increase from 41% in 2021. This trend is fueled by the rising average annual cost of full-coverage car insurance, which reached $2,278, up by 12% in the past year alone, according to Bankrate. In response to escalating insurance rates, drivers are adopting various strategies to mitigate costs. One common approach is adjusting deductibles to reduce regular payments. Additionally, many are exploring pay-per-mile insurance plans, where premiums are based on the number of miles driven. This alternative is gaining traction as more insurance companies, including Allstate, Nationwide, and USAA, offer such programs. The change in consumer behavior is evident in decisions like that of Juan and Perla Gonzalez from Miami. When faced with a hefty insurance premium for an SUV, the couple opted for a less expensive sedan, halving their annual insurance costs in the process. Moreover, pay-per-mile plans are growing in popularity, particularly among retirees and remote workers who drive fewer miles annually. While these plans can offer savings for low-mileage drivers, it is important to note that insurers often track additional data, such as driving habits, which can impact rates. The surge in insurance prices is attributed to various factors, including higher car prices, increased body-shop expenses, and a rise in car thefts. As a result, insurers are passing on these costs to consumers through higher premiums. Looking ahead, insurance premiums are projected to increase by an average of 9% in 2025, according to the Insurance Information Institute. In response, more customers are considering options like raising deductibles or paying premiums upfront for potential savings. As drivers strive to navigate the evolving landscape of car insurance, the emphasis remains on finding cost-effective solutions without compromising coverage. Whether through adjusting deductibles, exploring pay-per-mile plans, or making lifestyle changes, individuals are actively seeking ways to manage their auto-insurance expenses in an increasingly challenging market. For more insights on navigating the changing landscape of car insurance, readers are encouraged to reach out to experts in the field and explore various options available in the market. For feedback or inquiries, contact Veronica Dagher at Veronica.Dagher@wsj.com.