If it is time to renew your car insurance, you likely received a shock when you noticed the increase in premiums this year. In the first half of 2023, car insurance premiums have increased by an average of 17%, with some states reporting rate increases closer to 40%. Insurance companies are stating that these increases are driven by factors like increases in accidents, natural disasters, and repair costs due to inflation. Regardless of the reasoning, these rate hikes hit American pockets when budgets are already stretched due to high inflation on other consumer goods. Below are five ways to manage the costs of your car insurance premiums.

1. Check That Your Coverage Meets Your Needs

It may seem most logical to decrease your car insurance coverage to lower your premiums, especially since states only require a minimal amount of coverage. However, defaulting to dropping your coverage may expose you to risk if you get into a severe accident that requires significant medical expenses or a lawsuit on behalf of the injured party. Situations like this never seem like they will happen to you. However, accidents do happen. You purchase insurance to manage these risks, so make sure your policy will function appropriately if the time comes by ensuring your coverage is higher than your assets. If you have more coverage than you need, consider lowering your coverage; otherwise, look for alternative means to decrease your insurance costs first.

2. Ask Provider About Available Discounts

Asking your current provider for additional available discounts never hurts. If you are a good driver and have never filed a claim, you could potentially obtain a discount on your insurance premium. You could also get discounts for the length of time with the same provider or by moving your other insurance policies, such as your homeowner’s insurance, to the same provider as your car insurance.

3. Look at Other Providers

It never hurts to shop around and compare prices on car insurance. This may not be an activity you want to engage in each year for sheer convenience, but if your rates continue to climb, I highly recommend getting quotes from other providers. This exercise may result in finding a lower-cost option or will confirm that you are getting the best price available for your insurance needs.

4. Increase Your Deductible

An insurance deductible is the amount of money you pay out-of-pocket before your insurance covers the remaining costs associated with your claim. Increasing your insurance deductible from $500 to $1,000, for example, can decrease your premiums. This will increase the money you will need to pay if you get into an accident, but you can account for that by increasing your emergency fund to have this amount saved in case of an accident. In the meantime, your recurring premiums will be less.

5. Change Payment Mode

Your payment mode is the frequency of your premium payment. Companies offer various payment modes, such as annual, semi-annual, and monthly. Changing your payment mode does not actually decrease your insurance premium. Instead, this strategy spreads the costs over a different period, which may help make the premiums more affordable. Before changing your payment mode, check to see if additional fees are associated with paying at a frequency other than annual. Even if this option does require a fee, if the fees are minimal, it can still make sense to make this change to make your insurance payments work with your budget.

Paying for insurance is not a fun financial exercise, especially not when prices continue increasing. However, a little research could pay off in helping to manage the costs while ensuring your policy is still protecting you from catastrophic financial risk.