Three Signs You Are Paying Too Much For Auto Insurance

There are three signs you are paying too much for auto insurance. You may ask yourself, "Why is my insurance so high?" By checking out offers from other auto insurance companies every six months, finding out what coverage you need, and making sure you are bundling, you can really save big. It’s surprising how simple it is to lower your car insurance costs.. Learn more here about how to save on your monthly expenses by decreasing your auto insurance bill.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Jul 18, 2021

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What You Should Know

  • Paying too much for auto insurance is a common problem. Looking for the top three signs you are paying too much for car insurance is easy.
  • It occurs because many of us stick with the same company and forget to shop around.
  • Learning what different types of insurance coverages there are for various driving situations can pay off big.
  • By bundling your home and auto insurance, you can receive massive discounts.

Watching for the top three signs that you are paying too much for auto insurance can make it easy to add some padding to your budget. Let’s face it. We have all asked ourselves, “Am I paying too much for car insurance?” and “Why is my insurance so high?”

When you are trying to answer these questions, you want to look at the last time you compared car insurance companies’ prices.

Additionally, you should take the time to decide what type of auto insurance do you need. Lastly, check to see if you are with one of the best insurance companies for bundling home and auto insurance to find significant savings.

If you suspect you are paying too much for car insurance, shop around now. Enter your ZIP code to get free quotes from the best auto insurance companies.

Three Signs You’re Paying Too Much For Auto Insurance

Keep in mind; there are many ways to decipher if your car insurance rates are too high. These three signs you are paying too much for auto insurance are some of the simplest ways to determine whether or not you have the best rates possible.

#1 – Check Out Other Auto Insurance Companies Every Six Months

If you find yourself wondering if you are paying too much for car insurance and you haven’t gotten any updated quotes in six months, the answer is probably yes. This is the first sign you are paying too much for auto insurance.

Checking out your policy’s features and rates can give you the first clue in knowing if you are paying too much for auto insurance. Checking other insurance companies’ rates when your policy is ready to renew is the easiest time to do it. 

Staying up to date with what other auto insurance companies have to offer is one of the best ways to know if you’re paying too much for car insurance.

The simplest way to check out what a variety of companies have to offer is to slip your ZIP code into the box at the top or bottom of the page. This will give you fast information on rates from dozens of reputable auto insurance companies. In turn, you can find yourself saving hundreds of dollars.

Factors That Determine Your Auto Insurance Rates

Each insurer will factor in different items to determine what your specific rate is going to be. Knowing the most common elements can give you a clear idea of what will raise or lower your individual rates.

10 Contributing Factors for Car Insurance Rates:

  • Age
  • Yearly Mileage
  • State Requirements
  • Make and Model of Vehicle
  • Violations
  • Driving Record
  • Credit History
  • Marital Status
  • Gender
  • ZIP Code

Understand that these are only some of the critical items that will play into your current auto insurance rates. Additionally, each person’s situation will play a role in what they pay. Auto insurance is a very individualized thing.

If you have any blemishes on your driving record, less than perfect credit, a long commute, or live in a high crime area, your rates will go up. But auto insurance companies factor these things differently.

Your driving record is the biggest one. You can see in the table below how just one at-fault accident or DUI can affect how much you have to pay.

Average Annual Auto Insurance Rates By Driving Record
CompaniesAverage Annual Rates with a Clean RecordAverage Annual Rates with One accidentAverage Annual Rates with One DUIAverage Annual Rates with One Speeding Violation
USAA$1,933.68$2,516.24$3,506.03$2,193.25
Geico$2,145.96$3,192.77$4,875.87$2,645.43
American Family$2,693.61$3,722.75$4,330.24$3,025.74
Nationwide$2,746.18$3,396.95$4,543.20$3,113.68
State Farm$2,821.18$3,396.01$3,636.80$3,186.01
Progressive$3,393.09$4,777.04$3,969.65$4,002.28
Travelers$3,447.69$4,289.74$5,741.40$4,260.80
Farmers$3,460.60$4,518.73$4,718.75$4,079.01
Allstate$3,819.90$4,987.68$6,260.73$4,483.51
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
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With these significant insurers, you’ll pay anywhere from 17-127 percent more with one DUI. You can see how vital your record is, but this is also an excellent example of how different auto insurance companies will evaluate your risk profile differently.

#2 – What Type of Auto Insurance Coverage Do You Need?

Perhaps you own a classic car that you only drive for a few miles a year, and you are carrying the same coverage for it as your day-to-day vehicle.

If this is the case, it is a pretty clear sign that you are paying too much for auto insurance. So, you may ask yourself, “How much auto insurance coverage do I need?

Getting to know the different types of coverage available will help ensure you are getting the best rates possible. 

Average Annual and Monthly Auto Insurance Rates by Coverage Type

Coverage TypesAverage Annual Coverage RatesEstimated Monthly Coverage Rates
Liability Coverage$555$46
Collision Coverage$326$27
Comprehensive Coverage$148$12
Full Coverage$1,030$86
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We hear terms for coverage like liability, collision, comprehensive, and full-coverage, but most of us don’t really understand what they all mean. Let’s look at a quick breakdown of each so that you will have a better idea of what you are getting into.

Liability: 

Liability is essential coverage. It won’t cover you or your vehicle, but if you get in an accident that is your fault, it can save you from draining your bank account. The other parties’ medical and auto repair costs will be handled through your insurance instead of out-of-pocket.

The amount of liability coverage you carry is up to you. However, the more coverage you have, the safer you will be in terms of protecting your bank account. Most states have minimum liability coverage limits. But even if your state doesn’t, you should invest in a reasonable amount of coverage.

Collision: 

Collision coverage is going to protect your car regardless of who is at fault for an accident. Whether you total your car or need simple repairs, collision auto insurance will make sure the expense doesn’t come out of your pocket.

Comprehensive: 

Comprehensive auto insurance is going to cover any damage done to your vehicle not relating to a collision. When you hit a deer, a tree branch falls on your car, or hail cracks your windshield, comprehensive car insurance will take care of the bill.

Full-Coverage: 

Full-coverage is a term we don’t see as often because it is vast. Basically, full-coverage insurance is going to combine all the other types of insurance. Therefore, you will be covered regardless of what situation you are facing with your vehicle.

#3 – Are You Bundling Insurance Policies?

If you aren’t bundling, it is a huge sign you are paying too much for car insurance.

Even if you think you are getting a great deal from your car insurance company, you could likely be saving more. Reaching out to your current provider and asking questions about bundling is a simple solution to help pad your monthly budget.

I can tell you from personal experience that when I bundled my home and auto policies, it saved me a great deal of money. In fact, it can save you up to 25 percent in premium costs.

As with all things in life, there are pros and cons when it comes to bundling. More often than not, the pros will outweigh the cons, which is why many people choose to bundle their auto insurance with home, renters, and even life insurance policies.

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What can I save on my auto insurance?

The top three signs that you are paying too much for auto insurance is only a glance at what could be costing you more money. Taking the time to look at your policy as a whole and check out what other insurers have to offer is the best way to save your hard-earned cash.

You can see in the table below the availability of some of the most common auto insurance discounts.

Commonly Available Auto Insurance Discounts by Company
CompaniesClaim Free Discount Good Student DiscountHomeowner DiscountLow Mileage DiscountMultiple Vehicles DiscountSafe Driver Discount
21st Centuryxxxxx
AAAxxxxxx
Allstatexxxx
American Familyxxxxx
Ameriprisexxxx
Amicaxxxxxx
Country Financialxxxxx
Esurancexxxxxx
Farmersxxxxxx
Geicoxxxxxx
Liberty Mutualxxxxx
MetLifexxxxxx
Nationwidexxxxxx
Progressivexxxxxx
Safe Autoxxxxx
Safecoxxxxxx
State Farmxxxxxx
The Generalxxxxxx
The Hanoverxxxxx
The Hartfordxxxxxx
Travelersxxxxxx
USAAxxxxx
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It would help if you also looked for hidden auto insurance discounts. Multi-policy and good driver discounts are not always disclosed. Finding those discounts will keep your bill in check and ensure you pay as little as possible for stellar auto insurance.

How much is too much for car insurance? The truth is that you’re probably paying more than you should. Shop around. Enter your ZIP code to get free quotes from multiple insurers.

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