At a time when it feels like every news story is about how your costs are getting higher, USAA is bringing a little bit of financial relief to some of its car insurance customers in Florida. This week, the company announced a combination of rate cuts and direct dividend payments to eligible members that would total nearly $1 billion in savings.

The news comes just months after State Farm announced a similar dividend payout for its customers. So some drivers have been seeing at least a little relief even as soaring gas prices strain their wallets.

But which drivers are going to see discounts? Which ones will get a check in the mail? And how much savings can each person expect? Here's what we know so far.

Why is USAA giving out refund checks and rate cuts?

With this week's news, consumers see yet another example of why USAA is consistently named the favorite car insurance company in Kiplinger's annual Readers' Choice Awards. The popular car insurance provider that caters exclusively to military members and their families noted that recent policy reforms in Florida surrounding personal injury lawsuits have led to significant savings for the company.

In turn, USAA is passing some of those savings on to its members in Florida.

"Florida's civil litigation and tort reforms have curbed legal system abuse, helping reduce the legal costs that were a significant driver of premium increases, enabling USAA to pass meaningful savings directly to members," the company said in a press release.

The company noted that other states, including Georgia, Louisiana and New York, are also looking at reforming their legal systems. As more states crack down on legal system abuse, USAA might enjoy additional cost reductions in other states. Whether or not they'll pass some of those savings onto drivers in those states remains to be seen.

How much will Florida drivers get from USAA?

The exact amount of your dividend check will depend on various factors not yet disclosed by USAA. But the insurer did say in its press release that the average payment will be about $760 per USAA member, with as much as 25% of those eligible for a dividend payment getting over $1,000.

That's significantly higher than the State Farm refund checks that were announced in March. But since this payout is limited to USAA members in Florida, fewer members overall are going to see a check.

Those dividend payments are in addition to discounts that USAA says about half of Florida auto policyholders will get. The company has dropped rates in the state by about 14% on average over the last six months.

While USAA already tends to be favored for its competitive rates, it's always worth shopping for car insurance ahead of every renewal. Getting additional quotes ensures you're always getting the best possible rate for the coverage you need. So, if your policy is about to renew, use this car insurance tool, powered by Bankrate, to find your best rates today:

When will USAA refund checks go out?

According to the press release, USAA dividend checks will begin going out to customers on June 15. It's not clear how long it will take for every eligible member to receive their check. But, if you're curious to find out whether you're getting a check and when you can expect it, reach out to USAA directly to find out.

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Do you really want to "win" with your insurance?

Stick with me here, because I know how this sounds. You pay premiums every year. The bill comes. You grumble. You write the check. Then the next year comes, and you do it again. No claim. No check from the insurance company. No parade. No balloons. No oversized novelty check like you just hit the jackpot on a game show.

So it is very tempting to think, "When do I finally get something back?"

I get it.

But here is the problem with that way of thinking: An insurance claim is not a lottery ticket. It is not a slot machine. It is not you pulling the handle every year with your premium payment and waiting for three cherries to line up.

Because when you "win" an insurance claim, something bad had to happen first.

Your house burned. Your kitchen flooded. Your car was crunched. Someone got hurt. A lawsuit landed in your mailbox. A tree came through the roof. A thief decided your belongings looked better in his garage than yours.

Bingo and cha-ching?

Not exactly.

Why your insurance just sitting there is a good thing

Insurance is one of the few products in life that you buy hoping you never have to use.

Think about that. You do not buy a refrigerator hoping it never gets cold. You do not buy a car hoping it never starts. You do not buy a cellphone hoping it never rings (although, depending on who is calling, I suppose there are exceptions on that one).

But insurance? You absolutely hope it just sits there.

Quiet. Boring. Uneventful.

And boring is good.

Let's use the slot machine analogy for a minute. Every year, you pay your insurance premium. Some people imagine that premium as the coin going into the machine. Pull the handle. Nothing. Pull the handle again next year. Nothing. Then, finally, a claim happens, and money comes out.

"See?" they say. "I finally won."

No. You did not win. You had a loss.

Translation: The insurance company did not give you a prize. It performed a contractual obligation.

That is a very important distinction.

It's a contract

An insurance policy is a contract. Not a favor. Not a gift. Not charity. Not "good vibes from a carrier." You agree to pay the premium. The insurance company agrees that if a covered loss happens, subject to the terms, conditions, exclusions, deductibles, limits, endorsements, definitions and all the other exciting bedtime reading in the policy, it will pay what it owes.

I know. That sentence was a lot.

Translation: You pay your insurance company, and if the covered bad thing happens, your insurance company steps up.

That is the deal.

Now, does every claim go perfectly? Of course not. I am an insurance professional, not Willy Wonka. I do not live in a factory where rivers of chocolate solve coverage disputes.

• Claims can be frustrating
• Claims adjusters can be slow
• Estimates can differ
• Coverage questions can get complicated
• Deductibles can surprise people
• Sometimes companies get it wrong

But the basic idea matters: A claim is not a bonus. It is the policy doing its job after something you did not want to happen happened.

Here is another way to think about it. You pay for fire extinguishers, smoke detectors, seat belts, airbags, alarm systems and maybe even a home security service. If the smoke detector screams at 2 in the morning because there is a fire in the hallway, do you say, "Fantastic! I finally got my money's worth!"

I hope not.

You say, "Get everyone out."

Then, later, when your heart rate slows down, you may be grateful the smoke detector worked. You may be grateful the fire department came. You may be grateful insurance is there to help put things back together. But you are not celebrating the fire.

Same thing with insurance.

The claim is not the good news. The coverage is the good news.

Big difference.

And that brings us to another common mistake: Measuring the value of insurance only by whether you filed a claim.

"I paid for 10 years and never used it."

Good.

Really good.

Your very own lazy superhero

If you paid for homeowners insurance for 10 years and never filed a fire claim, that means your house did not burn down. If you paid for auto insurance and never had a serious accident, that means you were not injured, sued or stranded on the freeway exchanging information with someone whose first sentence is, "I didn't see you."

If you paid for liability insurance and never got sued, congratulations. That is not wasted money. That is peace, stability and protection sitting quietly in the background like a very boring superhero.

No cape. No theme music. Just there.

The purpose of insurance is not to make you richer. It is to keep a covered loss from making you much poorer.

That is the part people miss.

Insurance is not designed to be an investment account. It is not a savings plan. It is not a casino. It is risk transfer.

Translation: You are taking a financial risk that could be too big, too sudden or too ugly to handle alone, and you are transferring some of that risk to an insurance company in exchange for premium.

That is why the premium exists.

And yes, premiums have been going up, up, up. Especially in California. Homeowners insurance has become harder to find, harder to keep and harder to afford. Auto insurance is not exactly throwing a discount party either. People are frustrated, and I do not blame them one bit.

When the bill gets bigger, the temptation to say, "Well, I better get something out of this," gets stronger.

But again, what does "getting something out of it" mean?

If it means your house burned and the carrier helps you rebuild, that is not a lucky day. That is a terrible day with a financial backstop.

If it means your car was totaled, but the policy responds, that is not a jackpot. That is a bad day made less financially destructive.

If it means someone sued you, and your liability coverage provides defense, that is not winning the lotto. That is the contract showing up with a lawyer when you really, really do not want to be alone.

Insurance is the friend who answers the phone at 3 a.m. Not because you are having a party. Because something went wrong.

What insurance is good for

So what should you want from your insurance?

First, you want the right coverage before the loss. Not after. After is too late. You cannot buy fire insurance while the flames are already taking a tour of the living room.

Second, you want limits that make sense. The least-expensive policy may feel good on billing day, but it will feel terrible on claim day.

Third, you want to understand your deductible. The deductible is your part of the deal. It is not a surprise cover charge at a restaurant. It is in the contract.

Fourth, you want to know the exclusions. Exclusions are the policy's way of saying, "Not this." Boring? Yes. Important? You betcha.

And fifth, you want an agent who will tell you the truth, even when the truth is not wrapped in a bow.

Because the right question is not, "How do I get my money back?"

The right question is, "If something terrible happens, will this policy respond the way I need it to?"

That is the whole ballgame.

You don't have to love it

Listen, I am not asking anyone to love paying insurance premiums. I have been in this business a long time, and I have yet to meet someone who frames their renewal bill and hangs it over the fireplace.

But I am asking you to look at insurance for what it is.

It is not a lotto ticket.

It is not a slot machine.

It is not a prize.

It is a promise written in contract language, backed by dollars, regulated by rules and tested when life decides to throw a brick through your plans.

You do not buy insurance because you want a claim.

You buy insurance because, if a claim happens, you do not want to face it alone.

So the next time you pay that premium and nothing bad happens, try this thought instead: "Good. I hope I never need it."

Because the best claim is the one you never have.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Is your car out of warranty? Are you concerned about potentially expensive repairs? Have you heard spots on the radio or seen TV or internet ads from companies offering an extended auto warranty that covers all sorts of expensive repairs on vehicles with expired warranties?

More importantly, are you tempted to buy one of these service contracts? If so, wait! If you do it, you could be ripped off.

While some of these companies do, on occasion, pay for repairs, I've learned from experience that at least a portion of the extended-warranty industry is a scam. (The exceptions are the programs offered by auto manufacturers.)

What I've seen myself is backed up by thousands of complaints filed with the Better Business Bureau and state agencies and posted all over the internet.

As of 2025, there were about 400 third-party "auto extended warranty providers" in the United States. Before you decide to work with one, Google it along with the words "scam," "complaints," "fraud" and "failed to refund my money" to get a sense of the customer complaints. If you notice a pattern, don't sign up.

The case is still being litigated, but a consumer fraud suit was filed against Endurance Warranty Services in Illinois in March 2025. The lawsuit alleged that "Endurance does not deliver on its contractual obligations, (its) claim process can take several weeks or months to render decisions on claims, and (it) has denied repair coverage without any justification."

Endurance has denied allegations of systemic bad-faith denials and says that it has paid out more than $300 million in claims since 2012.

The BBB's website notes that there have been "3,666 total complaints in the last 3 years" about Endurance. Yet, as of this writing, Endurance has an A rating from the BBB.

High grades from the BBB help to scam customers

The BBB enjoys a high degree of respect, and hearing or seeing the phrase "A-rated by the Better Business Bureau" is taken as a stamp of approval that we can rely on to trust that particular business.

However, most people do not know that the criteria used by the BBB to award A ratings have little, if any, correlation with negative reviews and complaints. Simply responding to a complaint — regardless of it being resolved — allows a business to retain an A grade.

The result: Some companies that are out-and-out frauds display their BBB A ratings on their websites and in their advertising.

(In prior articles, I have urged that state agencies and the Federal Trade Commission file suit against the BBB, which, in my legal opinion, becomes a co-conspirator through its practice of facilitating consumer fraud by awarding A grades to companies they know, or should know, are ripping off the public.)

Here's my experience with a sales representative from an extended-warranty company that began when I answered the phone on a Friday afternoon and was told wonderful things about an extended warranty that I needed to buy.

'How's your BMW doing?'

"Mr. Beaver, I need to talk with you about your 2019 BMW that is out of warranty, and I am calling from MyAutoGuard that offers an extended warranty that you need."

I get these calls all the time from different extended warranty companies. Sales reps try to build a sense of fear, stressing how expensive major auto repairs can be and how all my worries will be taken away when I agree to buy their warranty. "We are A-rated by the BBB" is regularly stressed in many of these pitches and on their websites.

Immediately, I found MyAutoGuard on the BBB website. It currently has no BBB rating, though the company touts an A rating on its website.

And these comments appear on the BBB site:

• "If I could have left a zero-star rating, I would have."
• "Shame on you scamming elderly people on fixed incomes and making it impossible to cancel."
• "This is another scamming company. All these companies need to be put out of business."

Going over the cost to replace a transmission, engine, you name it, but with MyAutoGuard, I was assured that "covered" items would be replaced at no out-of-pocket expense. I would also get 24/7 roadside assistance, free towing, rental car reimbursement and on and on.

The sales pitch often sounds broader than the contract

Typically, you will hear "full coverage, everything major, just like a warranty from the manufacturer, giving you peace of mind." This could lead you to believe it is "bumper-to-bumper protection" — and they use that term — when, in reality, the contract covers only a narrow list of named components and excludes many of the failures most likely to occur.

When there is a claim, a denial might be based on the vehicle's pre-existing condition, wear and tear, maintenance records or technicalities.

'Great, send me a sample contract that I can take to my mechanic'

I said to the sales rep, "This sounds interesting, but before signing up, I need to read your contract so that I have a good understanding of what I am buying. And I want to take it to my own mechanic for review."

At that point, things turned ugly. I am paraphrasing, but here is what that part of our conversation sounded like:

"Will you please send me a contract to review with my mechanic?"

"Only if you purchase our service."

"So, you expect me to hand over my credit card number without having a chance to understand what it is I am buying. Is that it?"

"You get the contract after the purchase is complete."

"If you buy a home, buy or lease a car or rent an apartment, they give you the contract to read. No one says, 'Only if you pay first will we let you read the contract.' So what prevents MyAutoGuard from sending me a sample contract to review?"

(The sales rep was becoming more and more nasty.) "You get the contract when you buy the warranty! That's it!"

I was tempted to ask for the name and telephone number of his probation officer, as he sounded like any number of con artists I've spoken with over the years, but I restrained myself.

"What happens if, when I get the contract, I discuss it with my mechanic the next day, and he tells me I do not need it, and I immediately notify your company? Will I get my money back?"

"Take that up with customer service!"

At that point, I hung up.

My recommendation

So, to be perfectly clear — and you can quote me to any sales con you speak to who won't send you a contract to examine unless you buy that warranty now — never buy an extended warranty or vehicle service contract, or anything, unless you are allowed to read the entire contract beforehand, without obligation, and have it reviewed by an independent mechanic, an attorney or a family member.

And, remember, no deal is so great that you must accept the offer right now. If you are told that, run!

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The amount insurers pay out on home and car insurance claims has plummeted while the cost of your premiums have soared, according to a recent analysis by the Vanderbilt Policy Accelerator.

At a time when insurance companies are warning of the need for further rate hikes amid worsening climate change and the rising cost of home and auto repairs, this study says that they may already be charging most Americans far more than they need to remain solvent.

How did the study determine what portion of the premiums Americans pay was excessive? Where is all that extra money going if it's not going to claims? Most importantly, what can you do to cut your home and auto premiums at a time when all of your other bills are going up as well? Here's what you need to know.

Study argues Americans are being overcharged for insurance

Rate setting in the insurance industry is a complex and not very transparent process. Every company has its own set of risk factors and its own methodology for rating that it's reluctant to share with the public. Moreover, every state has its own set of rules around what insurers can and can't use when setting those rates. Some states even require companies to submit rate proposals to the state insurance commissioner for approval before raising premiums at all.

With that complexity in mind, what exactly did this analysis measure, and how did it determine what portion of premiums constituted an overcharge?

The Vanderbilt study, which was obtained exclusively by the Associated Press, looks specifically at what's called the loss ratio, or the gap between the amount insurers charge policyholders in premiums and the amount they pay out in claims every year.

For every dollar earned in premiums in 2024, the study says, companies paid out just 62 cents on claims on average. That's down nearly 20 cents since the 1990s, when companies averaged about 80 cents per dollar in claim payouts.

If the loss ratio in 2024 had instead been at that 80 cent level from years prior, Americans would have saved a combined $150 billion in that year alone.

According to the study, that $150 billion per year is going toward "corporate perks, corporate jets, stock-buy backs, excessive executive compensation, excessive dividends, excessive advertising, and excessive agent commissions.”

Insurance companies argue that's not the case. "Current loss ratios reflect the impact of enormous financial losses over the last several years and the steps insurers have taken (to) maintain and restore financial strength so funds are available to pay future claims," Don Griffin, vice president for policy and research at the American Property Casualty Insurance Association, told AP in an email.

How can you combat soaring insurance premiums?

The Vanderbilt study proposed a set of federal regulations to enforce a standard loss ratio for insurers nationwide in order to prevent excessive premiums. Right now, the insurance industry is regulated primarily at the state level, meaning the level of regulatory protections you enjoy depends almost entirely on which state you happen to live in.

Aside from waiting for those proposed federal regulations to become law or moving to a state with stronger consumer protection laws, what can you do to keep your insurance premiums under control at a time when loss ratios are apparently growing wider?

The most important step you can take is getting new quotes for your home and car insurance ahead of every renewal. Loyalty doesn't pay in insurance anymore. Any loyalty discount you may be earning for sticking around is unlikely to outweigh the incentive pricing insurers offer to woo new customers.

In the worst-case scenario, shopping around for new quotes every year will just confirm that your current price is the best you're going to find. In the best case, you could save hundreds every year for the exact same coverage.

Aside from switching your insurance every time you find a better deal, here are a few others effective strategies for lowering premiums without changing your coverage:

• Pay your policy in full up front rather than in monthly installments as many insurers offer a "paid in full" discount. This should work for both car and home insurance.
• Take a quick defensive driving course to save up to 10% on car insurance. Some states mandate discounts for taking defensive driving courses. But even if yours doesn't, call your insurer to see if they offer the discount anyway.
• If you're getting ready to buy a new car soon, check how much your favorite car models cost to insure first. Some models have far lower average premiums than others.
• Notify your insurer of any home safety upgrades you've made or plan to make, like installing a home security system or getting rid of a pool or trampoline.
• You may also be able to get discounts for home hardening upgrades and other projects that improve your home's ability to withstand weather-related hazards.
• Look for membership-related discounts from places like AAA, AARP or even Costco.
• Ask your insurer about senior discounts for home insurance if you're 55 or older.

Always scrutinize your insurance renewal quotes

Whether the soaring premiums are justified as insurance companies claim or excessive as the study suggests, the key takeaway for consumers is to always take a close look at that renewal offer. How is your insurer justifying those higher premiums? What discounts are they applying (or not applying)? Have any coverage terms changed?

Above all, remember that it doesn't hurt to shop around just to see how that renewal offer compares to what other insurers are willing to charge. Even if you really like your current insurer, you can always use those quotes to try to negotiate a better rate.

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You might have heard that taking a defensive driving course — sometimes called a driver improvement course or something similar — could lead to car insurance discounts.

But you might not know that some states require insurers to offer those discounts. You also might not know just how affordable the courses are and how big of a discount you can get for taking one.

Most eligible courses can be done completely online and take four to eight hours to finish. Often, insurers will keep the discount in place for three years after the date the course was completed. At that point, you can take the course again to get the discount for another three years.

Let's say you're paying $2,697 per year, the current national average cost of car insurance, and after taking the course, you get a 5% discount (the low end of what most states below mandate). That means you'd save a little more than $130.

Many of the eligible online courses I found (and linked to below) cost around $25. The course would pay for itself in premium savings in a matter of months.

States where drivers are entitled to a discount after taking an online driving class

These are the states where I could verify that some form of mandated discount exists. There might be other states not in the table that have less specific policies or states where no mandate exists but your insurer will still offer you a discount anyway:

Even if you don't find your state on the list, it's worth calling your insurer to see if you can save on car insurance by taking the course. A 5% discount on your policy is more than enough to make the short, online course worth your time.

If your current insurance company doesn't offer a defensive driving course discount, that might be your cue to switch your car insurance to a company that does.

Which online defensive driving courses are eligible for the insurance discount?

This can vary by state, but in most cases, a course from any of the following providers will be eligible for the discount, provided you meet any other eligibility criteria required in your state:

• AARP Smart Driver online course. An online course taken at your own pace. Price: $30 (AARP members get a 10% discount).
• AAA Roadwise Driver. An online course taken at your own pace. Price: $25
• Safe2Drive. An online course taken at your own pace. Price: $14.95 and up, depending on state (most states are $24.95)
• DriveSafe Online. An online course taken at your own pace. Price: $24.95 and up
• National Safety Council. An online course taken at your own pace. Price: $54.10 for the general defensive driving course or $29.99 for the mature driver course.

Before enrolling, make sure the course you choose is approved for the discount in your state.

What to know before enrolling in a defensive driving course

Whether you live in a state with laws about discounts or not, there are usually some conditions and caveats you should understand before enrolling. Namely, in some states, if you cause an accident while the discount is applied to your rates, your insurer might be allowed to remove the discount.

In other states, if you're taking the defensive driving course because of a court order (e.g. — as a condition of a traffic violation penalty), you can't use it to get a discount on insurance.

However, it might still be used to take points off your driving record in many states, and that could translate to lower premiums indirectly, as fewer points might be viewed as less risk to the insurer.

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Senate Bill 1486 is currently awaiting a vote in the Illinois Senate, and it's already being met with a mix of enthusiasm and disdain. Illinois Secretary of State Alexi Giannoulias has championed it as a set of strong consumer protections for Illinois drivers. But some in the insurance industry are saying the new regulations will lead to rate hikes or more policy cancellations.

With such mixed messaging coming out about this bill, Illinois residents might be concerned and confused about what the new law would mean for their budget.

If passed, it could have a real impact on both your home and car insurance premiums, so it's important to dig into the weeds and see what it's about.

What would Senate Bill 1486 do?

The sweeping consumer protection bill includes a lot of new regulations aimed at targeting everything from junk fees to fraud to unfair insurance rates. Here's a look at just the pieces of the bill that would impact what you pay for home and auto coverage:

• Insurance companies would have to provide you with 60 days notice if they plan to raise your home or car insurance rates by more than 10% at your next renewal.
• An insurance company wouldn't be allowed to shift costs related to out-of-state risks onto Illinois policyholders. For example, an insurance company doing business in multiple states can't charge Illinois homeowners more to offset the higher cost of claims they're paying out after a natural disaster in, say, California or Florida.
• Illinois's existing laws about excessive or unfair rate-setting practices would now apply to car insurance (as well as home insurance).
• The state's Department of Insurance would now have a more clear process for enforcing those existing laws.
• The bill will also cut the class time required for seniors (55-plus) taking a defensive driving course for a premium discount. If passed, you'd qualify for the discount after just four hours instead of eight hours.

If passed, these new regulations would go into effect in Illinois on July 1, 2027.

The reasoning behind Senate Bill 1486

The proposed policy changes are the result of concerns raised during Giannoulias's Driving Change campaign, which highlighted "how insurers use socio-economic data including credit scores, ZIP codes and age to set rates in ways that disproportionately impact seniors, working families and communities of color."

According to the Driving Change campaign page, full coverage car insurance rates shot up 18% on average in Illinois from 2023 to 2024.

In an independent study commissioned from O'Neil Risk Consulting & Algorithmic Auditing (ORCAA) and released by the secretary in April, car insurance rates across the state appeared to be tied, in part, to factors that aren't directly related to the actual risk of insuring the driver.

Poor credit, for example, can result in premiums that are almost triple what a driver with excellent credit would pay for the same coverage, despite credit scores not being directly related to a person's ability to drive safely.

This can be especially hard on seniors who face higher car insurance rates due to their age. For those on a fixed retirement income, it can be difficult for their budgets to absorb 10% or more rate hikes every year — especially if their driving record remains clean and all that's changing is their age.

In one public comment published on the Driving Change campaign page, an Illinois driver notes that her car insurance jumped from $75 per month to $212 per month the year she turned 65, despite a perfect driving record.

Is Senate Bill 1486 good news or bad news for Illinois policyholders?

In a policy brief on the Illinois bill, the Insurance Information Institute said, "The measure would add new regulatory layers that could impede the accurate pricing of risk while doing nothing to address the underlying causes of rising premiums."

The III argues that the new restrictions on how companies set rates "could erode the policyholder surplus insurers are required to keep on hand to pay claims" If that happens, insurers might choose to either raise rates to replenish the surplus or pull out of riskier states.

The institute also notes that, when factoring in median household income, insurance rates in Illinois are already more affordable than the national average.

However, the new law would not prevent insurers from raising rates in response to increasing risk in Illinois. It's specifically targeting the use of factors that aren't strongly linked to risk when setting rates, and to the cost-shifting practices some companies use to offset higher costs in states that are prone to more expensive natural disasters.

If an insurance company can clearly show that the rates charged reflect, in the words of Senate Bill 1486, "an actuarially sound estimate of the expected value of all future costs" of the individual risk, it should have no problem remaining in compliance with the new law.

Overall, this legislation looks like good news for Illinois homeowners and drivers. It will give those facing steep renewal rates more time to shop around and switch car insurance (or home insurance) if they find a better price, and it will limit the use of less relevant factors (like your credit score) in determining the rates you pay.

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For the fourth year, we're pleased to present the winners of our annual Readers' Choice Awards. In a survey we conducted on Kiplinger.com in January and February, more than 4,200 readers rated the financial products and services they use in 13 categories, from credit cards and banks to brokers, wealth managers and annuity providers. The results here offer valuable insight into the everyday experiences that Kiplinger readers have with their financial providers.

Respondents made their judgments on such criteria as their interactions with customer service, the likelihood they would recommend the product or service to others, and their overall satisfaction with it. They also had the option to leave comments about their providers, and we have shared some of them here (remarks may be lightly edited for length and clarity).

For each category, we've listed an overall winner that earned the highest total score as well as other providers that earned above-average ratings for the various criteria that readers assessed. Our thanks to all of you who participated in the survey.

Kiplinger Readers' Choice Awards: Auto Insurance Companies

Readers rated their auto insurance provider based on how competitive the rates are, their experience with filing claims and how likely they are to recommend the insurance company to others. These companies stood out from the pack in our survey.

OVERALL WINNER: USAA

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

For the second year in a row, USAA is the top choice among Kiplinger readers for both auto insurance and home insurance, earning plaudits for its affordable rates and exceptional customer service.

Overall, readers appreciate how responsive and knowledgeable the customer service team at USAA is, as well as how easy it is to get a human on the phone when you need them. "You never have to call back later to inquire about some part of the policy. You always get someone to talk to immediately," says one respondent.

Given that readers report a similar satisfaction with the provider's home insurance, many said they have both policies through USAA to take advantage of a bundling discount. And some said that they go so far as to get all of their insurance policies through USAA.

USAA's nationwide membership is available to military servicemembers and veterans, as well as the spouses and children of USAA members.

Highly-Rated Providers

Erie

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

Erie rivaled USAA across the criteria we asked readers to rate, tying the overall winner when it comes to affordable premiums and coming in a close second with how likely readers are to recommend the insurer.

One reader mentioned Erie’s "excellent and immediate service" when filing a claim, and many reported that Erie often offered the lowest rates when they shopped around to compare quotes.

Amica

Outstanding for:

• Claims experience
• Most recommended

Amica tied USAA when it came to claims experience this year, with one reader praising Amica's "high quality, responsive customer service" and another deeming Amica's handling of claims "superb."

The care that agents show clients counts, too: "Amica agents are kind," a respondent says. "My car was totaled in a horrible accident about seven years ago, and their main concern was always my well-being. Their rates are good, and they are easy to work with."

AAA

Outstanding for: Competitive rates

For AAA members, getting a quote on car insurance from the auto club just makes sense. According to Kiplinger readers, AAA often wins out on rates, and some also pointed to strong customer service.

Says one respondent, "I've had at least four claims handled with outstanding efficiency and great outcomes. The network of mechanics, body shops, and service centers that you can pick is extensive."

Farm Bureau

Outstanding for: Claims experience

Farm Bureau offers a wide variety of insurance policies, and both their auto insurance and home insurance policies rated highly for a positive claims experience among Kiplinger readers. According to one reader who had to file a car insurance claim last year, "Farm Bureau was absolutely top-notch, handling everything efficiently and with great communication throughout the process. ‘Seamless’ is the best description I can come up with."

Mercury

Outstanding for: Competitive rates

Among the auto-insurance winners, Mercury earned the highest score for offering affordable premiums. With prices going up all around, opting for an insurer that stands out for low rates can be a good way to keep monthly costs down. Mercury offers coverage in 11 states.

Kiplinger Readers' Choice Awards Categories

• Readers' Choice Full-Service Brokers*
• Readers' Choice Wealth Management
• Readers' Choice Cash Back Credit Cards*
• Readers' Choice Airline Credit Card Rewards Programs*
• Readers' Choice National Banks*
• Readers' Choice Internet Banks*
• Readers' Choice Auto Insurance Companies
• Readers' Choice Homeowners Insurance Companies
• Readers' Choice Annuity Providers*
• Readers' Choice Tax Software*
• Readers' Choice Peer-to-Peer Payment Services
• Readers' Choice Awards Travel Rewards Credit Cards*

How Readers Chose the Winners

Kiplinger readers were invited to take the Readers' Choice Awards survey on Kiplinger.com between January 22 and February 19, 2026. The survey asked respondents to choose the financial product or service that they most frequently use in 13 categories: brokerage firms, wealth managers, IRA providers, cash-back credit cards, travel rewards credit cards, airline credit card rewards programs, national banks, internet banks, annuity providers, homeowners insurers, auto insurers, tax software and peer-to-peer payment services.

We asked readers to rate each provider they selected on a scale of one to 10 based on a few criteria. In many categories, readers rated the strength of customer service, how likely they would be to recommend the product or service to others, and how satisfied they are overall with the provider. In some categories, we included more nuanced criteria. With wealth management firms, we asked respondents to rate the trustworthiness of a firm's advisers and the quality of its financial advice and retirement-planning services. For IRA providers, respondents assessed the mix of investment choices available to them. For peer-to-peer payment apps and tax software, respondents evaluated ease of use, and for auto and home insurance companies, readers judged the competitiveness of rates and strength of the claims experience.

We calculated an average (mean) score for each criterion with each provider. We also calculated an overall mean score for all providers for each criterion we asked readers to judge. We compared individual provider mean scores with the overall mean, and the three highest-scoring providers that had a score above the overall mean won an "outstanding" accolade; in cases of a tie, more than three providers are named, and if fewer than three qualifying providers achieved an above-average score, only those providers are named "outstanding." In each category, providers are generally listed in descending order by the number of criteria for which they received the "outstanding" designation — so a product or company that is deemed "outstanding" in three areas, for example, is listed before a provider with one or two "outstanding" awards.

To choose an overall winner in each category, we added together the mean scores for each criterion rated for each product or service. The provider with the highest total score in each category took the prize for overall winner.

*Because of a technical issue during the 2026 survey data collection, some providers that readers evaluated in certain categories, marked with an asterisk, were ranked using patterns from the 2025 consumer survey data.Affected were three of 18 brokerage firms, six of 20 cash-back credit cards, two of 15 travel rewards credit cards, one of 13 airline credit card rewards programs, three of 33 banks, two of 14 annuity providers, and one of eight tax-software products. All other categories fully reflect 2026 data. All results represent actual Kiplinger reader feedback.

Several Michigan parents are facing fines and car insurance issues tied to garaging rules, after running into problems insuring vehicles for children attending college out of state, according to ClickOnDetroit.

While these cases are surfacing in Michigan, the underlying rules apply nationwide. Car insurance companies base your policy on where a vehicle is primarily kept, and that can create complications in common situations such as college moves, temporary relocations or splitting time between two states.

Understanding how garaging addresses work can help you avoid unexpected fines, denied claims or even canceled coverage.

What 'garaging' means in car insurance

Insurers price car insurance policies based on where your vehicle is typically kept overnight, known as your "garaging address." This is the location where your car is parked most of the time.

While that's often your home address, it could also be a parking garage or another regular location.

That address plays a key role in determining your premium. Insurers evaluate factors tied to the location, including traffic volume, population density and risks such as theft or vandalism, to assess how likely you are to file a claim.

For example, a vehicle garaged in a rural area with fewer cars on the road and lower crime rates generally presents less risk. As a result, drivers in those areas might pay lower insurance rates than those in more densely populated or higher-risk locations.

This isn't just a Michigan problem

Insurers use garaging ZIP codes in every state to price policies, so this is not just a Michigan issue. States such as Florida and New York have stricter and more complex coverage requirements, and moving or temporarily relocating your vehicle can significantly change what you pay.

You're generally required to update your garaging address when your vehicle’s primary location changes. That includes situations in which a child takes a car to college out of state. Even if the move is temporary, insurers focus on where the car is kept most of the time.

Because your garaging address directly affects your rate, failing to update it could violate your policy terms. In some cases, insurers might treat this as rate evasion or misrepresentation, which can lead to denied claims, higher costs or even policy cancellation.

The college student insurance gray area

When students are in college, their cars often split time between their home and school location. Car insurance companies can approach that situation differently.

Some insurers allow students to remain on their parents’ car insurance policy while attending school out of state. Others might require students to buy a separate policy if they register the vehicle in the state in which they’re attending school.

Regardless of the rules an insurer sets about whether a college student can stay on a parent’s policy, most insurers typically require you to update the garaging address if the car is kept elsewhere most of the year.

Confusion and cost surprises can happen when parents don't realize that they need to update the garaging address even when a child makes a temporary move to go to college. Parents might consider that child’s official address as still being their home residence, but for insurance companies, the physical location of the vehicle is what matters.

What happens if you get it wrong

If you fail to update your vehicle’s garaging address, the consequences can be costly. Your insurer might deny a claim or reduce the amount it pays. In some cases, your policy could be canceled for misrepresentation.

In stricter states such as Michigan, there can also be legal consequences. Drivers might face fines or other penalties, even if the error was unintentional and the garaging address was not updated by mistake.

Some families are also being told they must register and insure a vehicle in the state where it is primarily used. In one case reported by ClickOnDetroit, a student from Michigan was pulled over while attending college in Texas and fined $750 because the car was still registered and insured in Michigan, despite being kept out of state.

How to avoid a costly car insurance mistake

To sidestep an expensive insurance error, take a few minutes to confirm where your car is garaged for most of the year and make sure that information is accurate and up to date with your insurer.

Before anyone on your policy moves, heads to college or plans an extended stay elsewhere, contact your insurance provider to update the garaging address. Requirements can vary by insurer, so it is important to ask exactly what is needed in your situation.

If the vehicle will be used in more than one location, such as splitting time between home and school, ask your insurer how to handle a multilocation arrangement so there are no gaps in coverage.

Keep in mind that a change in garaging location can affect your premium. Moving from a rural area to a more urban setting, for example, might increase your rate. Review the updated cost and, if needed, compare quotes from other insurers to see if switching could help you save.

Use the tool below, powered by Bankrate, to explore and compare some of today's top offers:

Why your car's location matters more than you think

Car insurance garaging rules can have real financial consequences, and many drivers are unaware they exist. While recent stories out of Michigan highlight the issue, these rules apply nationwide, meaning drivers in any state could face similar problems.

Taking a few minutes to check in with your insurance provider can help ensure your garaging information is accurate, especially if anyone on your policy is planning a move or extended stay elsewhere. A quick update now might help you avoid denied claims, higher costs or unexpected fines later.

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April is distracted driving awareness month and the safety statistics show that awareness is needed. Despite laws in most states banning the use of phones while driving, distracted driving remains a deadly and expensive problem in the United States.

29% of car accidents are caused by distracted driving, resulting in over 3,200 deaths and causing an estimated $395 billion in damages each year, according to a 2024 report by the National Highway Traffic Safety Administration (NHTSA).

The same report said one of the biggest challenges to addressing the problem is "the breadth of distraction sources and activities available to a driver." In other words, it's not just your phone. As technology continues to advance, the distraction is now coming from inside the car. New features meant to make driving more comfortable and stress-free end up encouraging drivers to pay less attention to the road.

You're driving distracted more often than you think

The NHTSA describes three types of distraction and you're almost certainly falling into at least one of them as you drive. Those distractions are visual, manual or cognitive:

• Visual distractions require you to take your eyes off the road, putting you at risk of not seeing a potential hazard.
• Manual distractions require you to use your hands for something other than driving, delaying your ability to react to hazards as quickly as you might need to.
• Cognitive distractions take your mind off of the task of driving, making you less alert to your surroundings.

Most distractions fall into two or more categories. Texting, for example, fits all three: it takes your eyes off the road, your hands off the wheel and your attention away from driving.

But even if you're smart enough to avoid texting while driving, you're likely engaging in activities that distract you in at least one of the three ways described above.

Not happy with the song on the radio? Changing the station or skipping to the next song on Spotify is a manual distraction. Unsure of where your next turn is? Your GPS navigation system is a visual distraction. Driving in a car with handsfree calling capabilities? You might have your eyes on the road and your hands on the wheel, but now your mind is distracted by the task of talking on the phone.

Your car isn't helping you stay focused on driving

As vigilant as you try to be, modern cars come with multiple features that make it easy to get distracted and may even make you feel safe enough to pay a little less attention. One of the culprits is your car's infotainment system.

A report by the AAA Foundation for Traffic Safety evaluated the infotainment systems of 40 different vehicle models, ranging from high-end Audis to entry-level Toyotas measuring the time it took drivers to complete tasks using systems in 2017 and 2018 vehicles. 29 of the models studied were found to have systems that made "high demand" or "very high demand" of your attention. The remaining 11 still commanded "moderate demand" of a driver's attention.

The ratings were based on how often the technology required your visual or cognitive attention and how long it took to complete a given task. This included common tasks you might do while driving like program your navigation, use voice commands, make a call, or adjust your audio entertainment.

The Tesla Model S, for example, allows drivers to search the internet while driving and features so much information on the screen that navigating the different menus and submenus can take up a lot of the driver's time (and attention). The voice commands meant to allow drivers to complete tasks without their eyes or hands were still slow, error-prone and imposed a high cognitive demand on drivers. Tesla isn't alone. The report found similar issues with many of the other cars studied.

The other major culprit of distracted driving is the rise of self-driving and driver assistance technologies.

At a board meeting last month, the National Transportation Safety Board (NTSB) urged congress to establish minimum safety standards for this technology following two fatal crashes linked to Ford's Blue Cruise system.

Ford's driver assistance system promises "hands-free highway driving," according to the manufacturer's website. The automated features can accelerate, brake and steer the vehicle for you.

The website also says drivers are supposed to keep their eyes on the road while using the feature. Cars with the technology also come with internal cameras that are meant to detect if a driver's eyes are no longer on the road. But the NTSB investigation into the two crashes alleges that these cameras failed to detect that, in both accidents, drivers were not looking at the road at the time of the crash.

“Our brains are just wired in that if we think that a system is going to take over and reliably handle a driving task, we get bored and we look for something else to do,” said Cathy Chase, president of Advocates for Highway and Auto Safety, during the board meeting.

While the focus was on the recent crashes involving Ford, the NTSB stressed that this is an industry-wide problem. As more and more carmakers add self-driving or driver assistance features to their vehicles, it's going to enable more and more drivers to use their "hands-free" driving time to navigate their increasingly distracting infotainment systems.

How to drive safely in a distracted world

With distractions everywhere, it can be difficult to stay focused on the road. But even partial distractions — like struggling with a voice command system or trying to skip a song you’re tired of hearing — can be dangerous.

Here are a few tips to help minimize distractions and drive more safely.

Program your navigation and audio before you drive
Some cars already limit your ability to program these things while the vehicle is in drive. But even if yours doesn't, you should get yourself set up before you hit the road. Cue up a long enough playlist to cover the length of your drive, for example.

If your steering wheel has volume or skip buttons, use those instead of the touchscreen. If you need to adjust your navigation, pull over to do so.

Don't take calls or answer texts (even with voice-to-text) while driving
If it's urgent enough to answer right away, pull over. If it's not worth pulling over to respond, it can wait until you're done driving.

Some phones allow you to turn on a driving mode which will temporarily pause notifications while you're on the road and automatically send a message to callers or texters, letting them know that you can't answer right now. Using this can help reduce the temptation to respond immediately.

Limit or avoid the use of assisted driving features
As the Advocates for Highway and Auto Safety president mentioned during the NTSB meeting in March, assisted driving features can lull you into a false sense of security. Sticking to old-fashioned manual driving keeps you more engaged with the task at hand.

Use Android Auto or Apple CarPlay instead of your car's native system
In the distracted driving report mentioned earlier, AAA found that both Android Auto and Apple CarPlay were still potentially unsafe, but they were far less demanding of drivers' attention than the sometimes clunky proprietary systems designed by automakers.

This isn't always an option in all cars. But if it is an option in yours, use it (just not while you're driving).

Don't assume other drivers are paying attention
With the rise of driver-assist technology and in-vehicle touchscreens, more drivers on the road may be distracted. An attentive driver might brake or slow down when traffic changes—but a distracted one may not react in time. That makes it even more important to stay alert and responsive behind the wheel to protect yourself.

Take a defensive driving course to boost your skills
There are many defensive driving courses available, including plenty of convenient online options. These cover everything from recognizing hazards to best practices for handling various road conditions. Some of it is sure to be a repeat of things you already know, but you'll likely learn a few new things as well.

If you're not convinced a course is worth your time (or money), remember that many insurers offer discounts on your premium if you take an approved course. They typically take about six hours to complete and can help you save on car insurance.

Just make sure you choose an approved defensive driving course, like one of the following:

• DriveSafe Online
• AARP Smart Driver Course
• Safe2Drive
• I Drive Safely
• National Safety Council (NSC)

Don't let a false sense of security lull you into an accident

Between the built-in car features that are demanding your attention and the convenience features that make you feel safe enough to take your eyes or hands off the task for a minute or two, it's getting easier to forget that you're sitting in a 4,000-pound hunk of metal barreling down the road at high speeds.

But driving is, in reality, the most dangerous mode of transportation by a long shot. According to the Bureau of Transportation Statistics, the overwhelming majority of transportation fatalities occur on highways.

In 2023, for example, over 40,000 of the 42,920 transportation deaths in the United States happened while driving. Likewise, over 99% of the 2.4 million transportation injuries that were reported that same year occurred on the road. The stats are similar for other years. By staying alert and minimizing your use of those convenient features your new car has (at least while driving), you can reduce your risk of becoming part of that statistic.

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Picture this: You're enjoying a leisurely drive when a vehicle makes a sudden stop in front of you. Okay, no worries, you brake. But then, an odd thing happens. The car in front of you reverses course and crashes into you.

The fun doesn't end there. The driver of the other vehicle gets out and delivers an award-winning performance. Either he complains of severe neck pain, or maybe he distracts you just enough while additional people climb out of the car, all claiming they were passengers injured in the crash.

This is a common example of an auto insurance scam, and not only can it ruin your day, but it can also impact your wallet with higher insurance premiums. I'll cover some of the most common scams impacting drivers and what you can do to protect yourself.

The scams spiking your insurance premiums

"Auto insurance scams fall into three buckets," Michael Giusti, an insurance analyst with InsuranceQuotes.com, told Kiplinger. They are:

• Hard fraud: This is where a driver makes a false claim that you hit them, when in reality, they braked to cause the accident
• Soft fraud: With these cases, an accident happens, but someone exaggerates the damage to their car or makes false medical claims
• Consumer: Ghost agents contact you through social media or messaging apps, promising you exceptionally low rates if you pay in cash today

And every false claim can impact how much you pay for insurance. Why? "Insurance is a risk-sharing venture," Giusti remarks. "It means auto insurance companies will want to recoup those costs, and higher premiums can be the result of that."

Auto insurance fraud costs Americans $308.6 billion annually, or $932.63 per driver, according to the Coalition Against Insurance Fraud. Therefore, knowing the red flags can help you spot fraud and stop it before you become a victim.

Unlocking the scammer's playbook: Common red flags to watch

Let's start with how you buy your auto insurance. If you do so through an independent broker or an insurance company, you don't have to worry about ghost agents scamming you.

And if you're looking to lower insurance costs, beware of deals that are too good to pass up. "Ghost insurance agents will reach out to you through social media or messaging apps promising super-cheap rates if you act now," Michael adds. "Then they can use AI to create documents that make it seem like they work for a reputable insurance agent."

Instead, use this Bankrate tool to find affordable insurance rates:

On the driving end, some of the most common scams involve:

• The swoop and swat: One vehicle stops in front of you, then a vehicle creeps up behind to ram you
• Paper collisions: Drivers will use a damaged vehicle and crash into you, claiming you caused the damage
• Exaggerated claims: The accident might be real, but the damage or medical claims are exaggerated to earn a higher settlement
• Buying coverage after the fact: Some may drive uninsured, purchase insurance after an accident and lie about when the accident happened
• Repair shop scam: Some repair shops use accidents to scam insurance companies by inflating repair costs, using cheap parts or charging without doing repairs. They might also try to get you in on the scam, stating that you won't have to pay the deductible and that they'll handle it with insurance.

How do you find a reputable repair company that your insurance company approves? Research several nearby, staying away from shops with common complaints, such as long wait times, faulty repairs or inaccurate billing.

Referrals also work well, provided your insurance carrier approves the repair shop.

How to protect yourself from scams

What happens if you notice something not right going on? "Insurance companies pay close attention to fraud, so be sure to contact your insurance provider first," says Michael. "Each state also has an insurance regulator who examines fraud."

Another option is to install a dash cam. It can record everything, supporting your claims to the police or court. Some newer cars also have mirrors that record video with replay capabilities — Tesla models are among these.

Below are three highly rated dash cameras that have useful features like wide viewing angles, high-resolution recording and app connectivity to help capture what happens on the road.

And if you're involved in an accident, "Take pictures of everything. The other driver, passengers, the vehicles involved, the road, skidmarks and anything else in the accident scene," Michael recommends. The more evidence you're able to present, the better protected you'll be.

Stay sharp: Information is your best defense against elaborate scams

Thieves have become adept at scamming insurance companies. By trusting your gut and staying informed about the latest scams, you can protect yourself if a staged accident happens.

Remember, your insurance carrier can be your best advocate when it comes to reporting fraud. They take it seriously because it impacts their bottom line. In turn, reporting it can protect yours.

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Car insurance rates have been soaring since the pandemic. But now, some drivers insured by State Farm could soon receive dividend checks, a share of the company’s profits, tied to those higher premiums. The news comes as loyalty in the insurance industry declines in response to those surging rates.

In 2025, the number of customers who re-shopped car insurance hit a record high of 57%, according to a J.D. Power analysis. More concerning for insurance providers is that rates of switching rose even among customers thought to be the most likely to stay put: those who bundle multiple policies with one insurer.

With customers more willing to jump ship for a better deal, insurance companies are finding ways to lower rates, offer discounts and, in State Farm's case, hand out cash to existing customers. Here's everything we know so far about the dividend checks, including eligibility criteria and payment amounts.

Dividend checks and rate cuts coming for millions of State Farm customers

In February, State Farm announced $5 billion total in cash back payments to car insurance policyholders, the largest dividend payout to customers in the company's history. The exact dollar amount each eligible customer will get will vary, but State Farm says the average check will be $100 per vehicle.

The major insurance provider is in a good position to offer these payouts. Consistently ranking as one of the most popular car insurance companies, State Farm reported an underwriting gain in 2025 of $1.5 billion, after reporting losses three years in a row prior to last year.

The gain came despite losses in its home insurance segment and was driven almost entirely by growth in car insurance policies.

Alongside dividend checks going out to customers, the company also announced lower premiums. The rate cuts announced will result in $4.6 billion in savings nationwide, with each eligible customer seeing an average of 10% lower premiums. Still, it's always worth shopping for car insurance ahead of each renewal to make sure you're getting the best deal available for the coverage you need.

Even with a 10% rate cut at State Farm, you still might find better rates elsewhere, especially as insurers compete on price in a market in which customers are more willing than ever to switch. Even if you don't find a better deal, there's no harm done by shopping around. In the worst-case scenario, taking a few minutes to compare quotes before renewing will confirm you're getting the best price for your car insurance.

Who is eligible for a dividend check from State Farm?

According to the statement released by State Farm, 49 million insured vehicles qualify for the one-time payouts expected to arrive sometime this summer. As mentioned, the average payout will be $100 per car, but the exact amount you get depends on the state you're in and the amount you pay in premiums.

In Oklahoma, for example, eligible customers are those who have an active private passenger auto policy as of December 31, 2025. The dividend payment those customers will receive will amount to 10% of the premiums paid during a predetermined period, for an average of about $112 per car.

The company has not yet specified exactly how or when customers will get paid, beyond stating that payments will go out this summer. But a State Farm spokesperson told CBS that more details will be announced in the coming months and confirmed that the cash payments will not come in the form of a statement credit.

This article will be updated as more details come to light to make sure anyone eligible has the information they need to get their payout.

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In January, a Florida resident filed a class action lawsuit alleging that GEICO added two strangers to her car insurance policy as named drivers without her consent. The additions increased her premiums as a result.

The complaint filed last month alleges that many other drivers nationwide have experienced the same thing with GEICO and is now seeking refunds for all customers impacted by this practice.

For GEICO's part, the insurance company argues that it acted in full compliance with the terms of its car insurance policies. So, what exactly happened and how can you avoid ending up in a similar situation? Here's what we know so far.

What is the GEICO class action lawsuit about?

According to the complaint filed on January 28, GEICO used a third-party source to match licensed or permitted drivers to addresses. Based on that data, GEICO sent an email to the policyholder stating that another driver was associated with her home address. The email gave her 15 days to respond and noted that if there was no response, the driver would be added to her policy.

The email read, in part, “If this person is insured elsewhere and should not be listed on your policy, please contact us at the number below with the name of the insurer and the policy number.”

The problem? The policyholder says she had no idea who the person was. GEICO was effectively asking her to provide insurance information for someone she did not know.

In December of that same year, the same thing happened again, with another unknown driver added to her policy. In both cases, her premiums increased as a result of the added drivers.

According to the complaint, the policy does not allow GEICO to add unknown drivers to a customer’s car insurance policy and does not include any provision stating that silence — meaning a lack of response to the emails — can be treated as consent.

In a motion to dismiss filed in 2025 related to an earlier version of the case, GEICO argued that it followed standard practice and did not breach any specific provision of its policy. The policyholder did not respond to either email within the 15-day window and continued paying the higher premiums.

However, as the complaint notes, because car insurance is required in every state, canceling coverage immediately after a rate increase may not be a practical option.

Because the case is still in its early stages, it’s unclear who will ultimately be included in the class action lawsuit or how much any potential payout might be if the court rules in the plaintiff’s favor. The legal team is seeking to expand the case nationwide, alleging that similar issues have affected customers outside of Florida.

If you’ve experienced a similar situation, you may want to monitor the case or consult an attorney to better understand your legal options.

What can you do to avoid this situation?

Something similar happened to me with a different insurance company a few years ago. The company found my siblings' information and sent me a notice that they would be added to my policy unless I could prove that they didn't live at my address.

While they weren't strangers as they are in this case, my siblings live in different states and already have their own car insurance. Still, the burden of proof was on me if I didn't want to pay extra to cover drivers who did not live at my address.

So, what's your best course of action to avoid ending up in a similar situation? Here are a few tips:

• Check your insurance policy regularly to make sure the details, including the drivers listed, are accurate. This is one of many reasons an annual insurance review is so important.
• If you receive a notice stating that additional drivers are associated with your address, contact your insurance provider directly using the phone number or website listed on your policy. Even if you don’t have documentation yet, ask what information would be required to resolve the issue.
• If you know the drivers, reach out to them and ask for the information or documents requested by your insurance.
• If you don’t recognize the drivers, contact your insurer and ask what proof is needed to remove them.
• Even if you never receive a notice like this, it’s important to keep an eye on your monthly spending. If your car insurance is set up on autopay, you could miss a premium increase because the payment is automatically deducted.

Whether the Florida courts determine that GEICO breached its contract or not, you certainly shouldn't be paying extra to cover drivers you don't know. But the outcome of this lawsuit could determine whether or not it's your responsibility to make sure the drivers listed on your policy are correct.

In the meantime, consider shopping for new car insurance after resolving the issue or before your next renewal. Comparing quotes can help ensure you’re not overpaying, especially if your premium increased unexpectedly. If you decide to switch, you can provide feedback to the insurance company that did this, explaining precisely why they lost your business.

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You've probably heard of no-fault states in the context of car insurance. But if you don't live in one of the 13 states known to have that system, you probably think those rules don't apply to you. Depending on which state you live in, you could be wrong.

The distinction between a no-fault state and an at-fault state is far from black and white. That's especially true in the four states below that still have some tricky no-fault car insurance laws you need to know about.

If you don't brush up on the rules, you could end up paying extra for insurance you don't really need. To keep your coverage levels and premiums right where you want them, here's what you need to know if you live in or are moving to what you thought was a straightforward at-fault state.

What’s the difference between at-fault and no-fault car insurance?

At-fault (also called tort) states require the driver who caused the crash to pay for injuries and damages through their insurance. In these states, drivers typically file claims against the at-fault driver’s liability coverage and might sue for additional damages if needed.

No-fault states, on the other hand, require drivers to carry personal injury protection (PIP). After an accident, drivers file injury claims with their own insurance first, regardless of who caused the crash. Lawsuits are usually limited unless injuries meet certain thresholds.

Some states blur the lines between these systems by requiring insurers to offer or include PIP coverage even though they operate primarily as at-fault states.

States with an at-fault system but some tricky no-fault insurance laws

Here’s how each state’s hybrid rules work in practice.

Arkansas

Arkansas has a tort (or at-fault) system, but still requires insurers to offer you personal injury protection coverage. That means when you're shopping for car insurance, the quotes you see will include that coverage unless you actively opt out of it.

PIP can come in handy because it usually means a quicker payout than waiting for fault to be established before filing against the at-fault driver’s insurer.

However, note that PIP is primarily for medical expenses and lost wages. If you have good health insurance, the medical expense side of that won't necessarily be an issue. As far as lost wages are concerned, it might not be worth filing a claim if you only miss a day or two of work. Workers with paid sick leave might not be eligible to claim lost wages at all.

If you do opt to keep the PIP coverage automatically included in your Arkansas car insurance policy, it's probably worth bumping it up above that $5,000 minimum to really make the coverage worthwhile.

Maryland

Like Arkansas, Maryland is a tort state that doesn't mandate drivers carry PIP, but does mandate insurance companies offer it. As with Arkansas, the coverage will automatically be included in any policy you buy in the state unless you opt out.

With a minimum coverage limit of just $2,500, this amount of PIP is less useful than the minimum in Arkansas. If you do want to keep the coverage, get quotes for higher coverage levels.

Remember that in a tort system like the one in Maryland, you have the right to sue the at-fault driver for your injuries, economic losses and your non-economic losses (pain and suffering).

That process will take longer than filing a PIP claim with your own insurer. But, if your PIP coverage is capped at $2,500, you might end up needing to go the lawsuit route anyway after an accident because that limit will be exhausted pretty quickly.

Another tricky thing about Maryland's insurance laws is the way the uninsured motorist coverage works. Technically, the minimums listed above are the minimums you need to maintain. But, if you were to increase your liability insurance, companies are required to automatically increase the uninsured motorist coverage to match that.

You have to opt out of matching coverage by asking to lower the uninsured motorist coverage back down to the minimum.

Oregon

Oregon is a special case. It's a tort state (meaning you reserve all your rights to sue the at-fault driver), but it also mandates a minimum level of PIP. You can't opt out of it like you can in the other states on this list.

What does that mean for drivers in an accident? Basically, you have two options if you aren't at fault. If you're not at fault, you can choose not to use your PIP coverage and file a claim with the at-fault driver's insurance for both bodily injuries and property damage.

Your second option, if you don't want to wait for fault to be determined, is to file a PIP claim with your own insurance right away, then file a claim with the at-fault driver's insurance afterward to recoup those costs. If there's still damages leftover after exhausting both your PIP coverage and the other driver's liability coverage, you can sue them for the rest.

Note that in Oregon, your insurance company can demand reimbursement on a PIP claim if the other driver's insurance ends up paying you. The company can do the same if you win a settlement in court.

Texas

Texas's car insurance laws operate a lot like Arkansas or Maryland. PIP isn't mandatory but the minimum coverage listed above is automatically included unless you opt out. The same goes for the uninsured motorist coverage. You must reject both coverages in writing if you don't want them included in your policy.

Otherwise, Texas is a tort state where drivers retain all rights to sue the at-fault party for injuries and damages.

If you haven’t compared auto insurance quotes recently, you could be paying more than necessary. Use the tool below to explore and compare some of today's top auto insurance offers, powered by Bankrate:

The difference between no-fault and at-fault isn't always clear

As the states above make clear, car insurance laws can vary widely and even broad distinctions aren't as clear cut as you might think. No-fault states are widely misunderstood by drivers. Even fewer drivers are aware that you might still be facing some confusing no-fault laws in states that are supposed to have an at-fault system.

Whether you've been in the same state for years or you just moved, it's worth taking the time to learn exactly how the laws work where you are so you can better understand your rights and requirements when it comes to buying car insurance and filing claims after an accident.

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You've heard the advice to shop around for new quotes once in a while to see if you can beat your insurance company's renewal offer. But what if you shop around ahead of every renewal? And what if you get a better quote somewhere else every time? Is there any reason you shouldn't hop from one provider to another every year (or every six months) to get the best price?

The short answer is no. If you're constantly seeing lower prices elsewhere, there's not really a good reason to choose the more expensive premium just for the sake of not being a policy hopper. Despite the loyalty discounts your current provider might be offering, loyalty rarely pays in insurance.

With that said, there are some tradeoffs you make by frequently switching your insurance, and there are some considerations to keep in mind before jumping ship. Here are some of the things you might be sacrificing by switching – whether or not they matter depends on your situation.

You'll lose out on certain discounts

Say you previously bundled your home and auto insurance to take advantage of a discount your insurance company was offering. Now, you've found cheaper car insurance through another provider, but your home insurance isn't up for renewal yet, or you still like the price you're paying where you're at.

Before making the switch, find the breakdown of how your current premium was calculated. If you've bundled multiple policies, get the breakdown of each policy in the bundle.

As an example, I bundled home and auto last year because the same company offered the best price for both – and it was even better after the bundle discount. This year, I was able to find a lower price on car insurance from another provider.

Before switching, I checked my current paperwork to see how much of a discount I was getting on home insurance by bundling. The discount was about $200. Meanwhile, the competitor's quote for car insurance was about $500 lower than the renewal offer. So I switched. Even though my home insurance premium will go up a bit when I lose that discount, I'm still paying less overall than I would be if I'd kept the bundle.

But, if the price difference you see isn't enough to offset any discounts you'll lose, it's probably better to stay.

Another common discount that you could lose when you switch is your loyalty discount. This is a modest premium discount that sometimes gets bigger the longer you've stayed with the same company. But the loyalty discount isn't always better than the introductory rates a company will offer to win over a new customer, so it's always worth shopping around at each renewal.

You may not be eligible for certain benefits

Beyond certain discounts, there are other perks sometimes tied to how long you've been with your insurance company. The main one here is accident forgiveness. This is a benefit that basically shields your policy from a rate hike following an accident.

Sometimes, it's based solely on your driving record. In that case, whether you're a new or long-term customer doesn't matter. What matters is how long it's been since you last had an accident. But some companies restrict accident forgiveness to customers who've been with the same provider for a certain length of time.

Is accident forgiveness worth staying with your current insurance provider despite the higher premium? That depends. If you don't have any accidents on your record and you're a safe driver, maybe not. If you've already had an accident and used this perk to keep your premium lower, you might want to stay to keep it active.

Do you know whether the new, lower quote you found already factors in that accident on your record? If not, the lower premium from the competitor is likely to jump once the company checks your claim history. If yes, then your current provider's accident forgiveness isn't really saving you money.

Make sure the coverage is comparable before switching insurance

If you get a new quote that's a lot lower than your renewal offer, you might be ready to take the leap. But before signing that paperwork, make sure to compare the policies side by side. Is the coverage actually the same? Are there any exclusions the new policy has that the old one doesn't?

If you got a quote for a policy with, say, a higher deductible than you currently have, have you compared that to what your current company would charge if you raised your deductible by the same amount?

Shopping around is a great time to reevaluate your coverage needs and see what tweaks you can make to save. But if you're making any changes to your coverage, get a quote from your current provider for that changed coverage, too. That way, you're comparing apples to apples to make sure you're truly getting the best available price.

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In most states, car insurance follows an at-fault or tort system, in which the driver who caused an accident is responsible for paying for damages. But if you live in one of the 13 states below, you're subject to what's called a no-fault system.

In a no-fault system, it's not that no one is responsible for an accident. In most states, the driver who caused the accident is still on the hook for property damage. Instead, states with these laws handle injury claims differently and place restrictions on your right to sue the at-fault driver.

Beyond these high-level similarities, every no-fault state is unique in how their laws work. Some are "pure" no-fault states, while others have a confusing mix of no-fault and tort systems. Here's an overview of how no-fault car insurance laws work in every state that has them and what drivers need to know when shopping for car insurance in each one.

How no-fault car insurance works

Under a no-fault system, drivers generally file injury claims with their own insurance after an accident, regardless of who caused it. This coverage typically comes through personal injury protection (PIP), which helps pay for medical expenses and sometimes lost wages or other injury-related economic losses.

Property damage, however, is usually still handled through the at-fault driver’s insurance.

Another key difference is lawsuits. In many no-fault states, you can only sue the at-fault driver if your injuries meet certain legal thresholds, such as exceeding a dollar amount or involving serious injury.

Unless noted otherwise, no-fault laws apply only to bodily injury claims. Property damage typically still follows fault rules.

States with no-fault car insurance systems

Delaware

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $15,000 per person / $30,000 per accident
• When can you sue the at-fault driver? No restrictions on your right to sue

Delaware shows why no-fault laws can be confusing. The state requires drivers to carry PIP coverage, but it does not limit your ability to sue an at-fault driver.

After an accident, your own PIP coverage pays medical expenses and certain injury-related costs regardless of who caused the crash. However, you can still file a lawsuit against the at-fault driver for additional damages, including pain and suffering, without meeting an injury or dollar threshold.

The main restriction is that you can;t recover expenses already paid through your PIP coverage. For example, if your medical bills total $20,000 and your PIP policy covers $15,000, you could only pursue the at-fault driver for the remaining $5,000.

Florida

• Liability insurance required: Property damage only
• Minimum personal injury protection (PIP): $10,000
• When can you sue the at-fault driver? When medical expenses or lost income exceed PIP limits, or injuries involve permanent injury, significant disfigurement, loss of a major bodily function or death

Florida is the only state where you're not required to carry bodily injury liability insurance. Because of this, your PIP coverage will definitely come in handy, as there's a good chance the other driver doesn't have any liability insurance to cover your injuries.

After an accident, your PIP policy covers medical expenses and certain lost wages, regardless of who caused the crash. If your costs exceed your PIP limits — or your injuries meet Florida’s serious injury threshold — you might file a claim against the at-fault driver.

Because some Florida drivers carry little or no bodily injury liability coverage, many experts recommend purchasing higher PIP limits and adding uninsured or underinsured motorist coverage to help protect against out-of-pocket expenses.

Florida still follows an at-fault system for vehicle damage. Drivers typically file property damage claims through the at-fault driver’s insurance to cover repair costs.

Hawaii

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $10,000
• When can you sue the at-fault driver? When medical expenses or lost income exceed $5,000, or injuries involve permanent loss of a body part or function, serious disfigurement or death

Hawaii's no-fault system is typical of most no-fault states. You still need to carry liability insurance. But a driver's right to sue the at-fault party is limited to accidents where the injuries or damages exceed a certain threshold.

After an accident, PIP typically covers medical expenses and certain lost income regardless of fault. Property damage, however, still follows fault rules, meaning drivers usually file claims through the at-fault driver’s insurance or rely on their own collision coverage.

Kansas

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): Structured benefits (see breakdown below)
• When can you sue the at-fault driver? When medical expenses exceed $2,000, or injuries involve permanent loss of a body part, disfigurement, certain fractures, permanent injury or death

Kansas follows a traditional no-fault structure but stands out because of how its PIP benefits are divided into specific coverage categories rather than a single coverage limit.

Drivers must carry liability insurance and PIP coverage, and lawsuits against the at-fault driver are limited unless injuries exceed Kansas’ legal thresholds.

Kansas requires minimum PIP benefits that include:

• $4,500/person for medical expenses
• $900/month for disability/loss of income (for one year)
• $25/day for substitution benefits
• $2,000 for funeral expenses
• $4,500 for rehabilitation or re-employment training
• $900/month for disability/loss of income (for one year) for survivors
• $25/day for substitution benefits for survivors

Because benefits are divided into separate categories, drivers can exhaust certain coverage types even if they have not reached their total available PIP benefits.

Kansas drivers should review how their PIP benefits are allocated, since individual coverage categories can run out before total coverage is exhausted.

Kentucky

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $10,000 (automatic unless rejected)
• When can you sue the at-fault driver? When medical expenses exceed $1,000 or injuries involve broken bones, permanent injury, disfigurement or death — unless you opt out of no-fault coverage

Kentucky is a “choice no-fault” state, meaning PIP coverage is automatically included in car insurance policies unless drivers formally opt out.

Drivers who keep PIP coverage must meet the state’s injury or expense thresholds before suing an at-fault driver. However, drivers who file a no-fault rejection form with the state can opt out of PIP and regain full rights to sue without meeting those thresholds.

Even drivers who opt out must still carry “guest PIP,” which provides injury protection for passengers and pedestrians involved in an accident. Opting out of Kentucky’s no-fault system can expand your legal rights but might increase financial risk after an accident.

Massachusetts

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $8,000
• When can you sue the at-fault driver? When medical expenses exceed $2,000 or injuries involve permanent disfigurement, bone fractures, loss of a body part, loss of vision or hearing or death

Massachusetts follows a relatively straightforward no-fault system. Drivers must carry liability insurance and PIP coverage, which pays medical expenses and certain injury-related costs regardless of who caused the accident.

Drivers can file a lawsuit against the at-fault party when injuries meet Massachusetts’ legal thresholds or medical expenses exceed $2,000. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Because Massachusetts has a relatively low threshold for lawsuits, drivers might want to consider carrying higher bodily injury liability limits to help protect against potential claims.

Michigan

• Liability insurance required: Bodily injury and property damage (with special rules)
• Minimum personal injury protection (PIP): Historically unlimited, though drivers may now choose lower limits if eligible
• When can you sue the at-fault driver? For excess economic losses after PIP is exhausted, or for pain and suffering if injuries involve serious impairment, permanent disfigurement or death

Michigan has one of the most distinctive and complex no-fault systems in the country.

After an accident, drivers typically file claims through their own insurance for both medical expenses and economic losses, regardless of who caused the crash. Property damage claims between Michigan drivers are also largely handled through their own policies rather than the at-fault driver’s insurance.

Because Michigan historically required unlimited PIP coverage, most drivers are unlikely to exceed their medical coverage limits. Lawsuits are generally limited to cases involving serious injury, permanent disfigurement or death, although drivers might also pursue claims for economic losses that exceed their selected PIP coverage.

Michigan also handles vehicle damage differently than most states. Since PIP does not cover vehicle repairs and property damage claims against another Michigan driver are limited, collision coverage is especially important. The state offers three collision coverage options:

• Limited collision: Covers damage only if you are 50% or less at fault
• Standard collision: Covers repairs regardless of fault
• Broad form collision: Covers repairs regardless of fault and waives your deductible if you are less than 50% at fault

Michigan also allows drivers to file a “mini-tort” claim to recover part of their collision deductible from the at-fault driver.

Recent reforms allow drivers to choose lower PIP coverage limits, which can reduce premiums. However, drivers selecting coverage below $250,000 must meet certain eligibility requirements, such as qualifying health coverage through programs such as Medicare or Medicaid.

Michigan drivers rely heavily on their own insurance after accidents, making collision and PIP coverage choices especially important.

Minnesota

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $40,000 ($20,000 medical / $20,000 non-medical)
• When can you sue the at-fault driver? When medical expenses exceed $4,000 or injuries involve permanent disfigurement, disability lasting 60 days or more, dismemberment or death

Minnesota follows a traditional no-fault insurance system. Drivers must carry liability insurance and PIP coverage, which pays medical expenses and certain economic losses regardless of who caused the accident.

Minnesota requires at least $40,000 in PIP coverage, split evenly between medical expenses and non-medical costs such as lost wages or replacement services. Drivers can file a lawsuit against the at-fault party if injuries exceed the state’s legal thresholds or medical expenses surpass $4,000. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Minnesota also requires out-of-state drivers to carry PIP coverage while operating a vehicle in the state. Many insurers automatically adjust coverage to meet Minnesota’s requirements, but drivers should confirm coverage before traveling.

New Jersey

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $15,000
• When can you sue the at-fault driver? Only for serious injuries such as loss of a body part, significant disfigurement, displaced fracture, loss of a fetus, permanent injury or death — unless you choose an unlimited right-to-sue policy

New Jersey is a choice no-fault state, but unlike Kentucky, drivers cannot opt out of PIP coverage. Instead, drivers choose between limiting or preserving their right to sue.

Most policies default to a limited-rights option, which restricts lawsuits against at-fault drivers unless injuries meet the state’s serious injury threshold. Drivers can choose an unlimited right-to-sue policy, which typically increases premiums but allows lawsuits without meeting those thresholds.

After an accident, PIP coverage pays medical expenses and certain injury-related costs regardless of fault. Property damage claims still follow fault rules and are usually handled through the at-fault driver’s insurance.

New York

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $50,000
• When can you sue the at-fault driver? When economic losses exceed $50,000 or injuries involve dismemberment, fracture, loss of a fetus, loss of use of a body part or function, inability to perform normal activities for at least 90 of the 180 days following the accident or death

New York follows a traditional no-fault system. Drivers must carry liability insurance and PIP coverage, which pays medical expenses and certain economic losses regardless of who caused the accident.

New York requires one of the higher minimum PIP coverage limits at $50,000. Drivers can file lawsuits against at-fault parties if injuries meet the state’s serious injury threshold or if economic losses exceed PIP coverage limits. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

North Dakota

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $30,000
• When can you sue the at-fault driver? When medical expenses exceed $2,500 or injuries involve dismemberment, permanent disfigurement, disability lasting more than 60 days or death

North Dakota follows a traditional no-fault insurance system. Drivers must carry liability insurance, PIP coverage and uninsured/underinsured motorist coverage, making the state’s minimum insurance requirements more comprehensive than many others.

PIP coverage pays medical expenses and certain economic losses regardless of fault. Drivers can file lawsuits against at-fault parties if injuries meet North Dakota’s legal thresholds or medical expenses exceed $2,500. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Pennsylvania

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $5,000
• When can you sue the at-fault driver? For serious injuries such as permanent disfigurement, serious impairment or death — or if the at-fault driver was uninsured, intoxicated or driving an out-of-state vehicle, unless you choose full tort coverage

Pennsylvania is a choice no-fault state that gives drivers the option to choose between full tort and limited tort coverage when purchasing insurance.

Drivers who select limited tort coverage typically pay lower car insurance premiums but can only sue an at-fault driver if injuries meet Pennsylvania’s serious injury threshold or involve certain exceptions, such as accidents involving uninsured, intoxicated or out-of-state drivers.

Drivers who choose full tort coverage pay higher premiums but retain unrestricted rights to sue for damages after an accident.

Regardless of tort selection, drivers must carry PIP coverage, which pays medical expenses and certain economic losses regardless of fault. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Utah

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $3,000
• When can you sue the at-fault driver? When medical expenses exceed $3,000 or injuries involve dismemberment, permanent disfigurement or death

Utah requires drivers to carry liability insurance and PIP coverage, but its minimum PIP requirement is among the lowest of any no-fault state.

Utah’s PIP coverage applies only to medical expenses by default. Drivers must purchase additional coverage if they want protection for lost wages or other economic losses.

Drivers can file lawsuits against at-fault parties if medical expenses exceed $3,000 or injuries meet Utah’s legal severity thresholds. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

No-fault insurance is often misunderstood, so it's worth knowing your state's laws

As you can see from the variation in laws from one no-fault state to the next and even a few at-fault states, no-fault insurance can mean a lot of different things. What it (almost) never means is that you can't file a claim with the at-fault driver's insurance after an accident.

It's worth taking a closer look at how the system in your state works so you know exactly what your options and your rights are if you get into a car accident in your state.

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Every time your car insurance is up for renewal, you're faced with the decision of where to set your car insurance deductible. If you raise it up a bit, you could save on car insurance premiums each month. If you lower it, you could ensure that an accident won't completely wipe out your savings or, worse, push you into debt.

But, how high a car insurance deductible is too high? How low is too low? As with most personal finance questions, there's no one right answer. That's why rules of thumb like the one-month car insurance deductible rule can be a useful way to ballpark the right amount for your budget.

How does the one-month rule for setting your deductible work, and is it a good rule for every driver? Here's what you need to know as you shop for car insurance.

What is the one-month car insurance deductible rule?

The one-month rule for setting your car insurance deductible argues that you should choose the amount based on how much you put in savings in one month. That way, if you get in an accident, you would simply have to spend your monthly savings on the repairs instead of stashing it in, say, your high-yield savings account.

In that scenario, the savings you've built up until then will remain untouched, and you'll be back to building it up again by the next month.

This is a good idea that would reduce the risk of a car-related emergency derailing your financial goals for longer than one month. And, for those who put away a good amount each month, it's an easy rule of thumb to balance the cost of car insurance with the financial risks of getting in an accident.

What if you aren't saving much (or anything) each month?

The one-month rule is a realistic rule of thumb for many drivers. But it doesn't quite work for those who aren't setting anything aside in savings each month – or not enough to meet even the lowest available deductible. For example, if you've retired, you typically switch from saving to spending what you've worked so hard to save.

Whether you're living on a fixed income or paycheck-to-paycheck, in these cases, the one-month rule isn't going to work for you. So, how should you choose a car insurance deductible?

For most in these scenarios, the answer is likely to push the deductible as close to the lowest available one as you can while still being able to afford the premium. This will make your monthly bill a little more expensive, but also make your expenses more predictable.

For retirees in particular, how much that predictability is worth depends on how confident you are in your savings. Are you already withdrawing the maximum your savings can bear and worried you might run out? Then, you definitely want to lower that deductible as much as possible to reduce the risk of an emergency knocking you off track.

On the other hand, if your retirement fund is healthy and you've padded your monthly budget with plenty of extra for nonessentials like travel and entertainment, you can instead set your deductible at, say, one month's worth of nonessential spending. That way, in the worst-case scenario, an accident will just mean one month of skipping out on your usual fun or travel plans.

Should your deductible be lower for luxury or collector cars?

Your car model does impact your premium, but should it impact your deductible, too? Not necessarily. The premiums for luxury, exotic or classic car insurance are already going to be higher than they are for a less valuable ride. So, the amount you're saving by raising your deductible from, say, $500 to $1,000, might seem negligible.

At the same time, if you drive a high-end or specialty car like this, you've likely already budgeted for higher repair and maintenance costs. And, if you've been restoring a collector car yourself, you're probably handy enough to take care of some of the needed repairs on your own.

With all of that in mind, you may be able to stick to the one-month rule, or you may even be able to raise the deductible even higher, knowing that you've either got the cash or mechanical skill to cover the less costly repairs.

Choose a car insurance deductible that your budget can bear

The underlying idea with the one-month rule is that your car insurance deductible should be set at a number that won't derail your financial plans for an extended period of time. As you play around with the different deductibles available, think about how long it would take you to recover from an emergency at those different amounts.

If money is tight and even a $500 emergency would be a stretch, accept the higher premium to keep that deductible lower. If you've got a healthy emergency fund or plenty of wiggle room in your budget – even if it means skipping a couple of weekends out or postponing a vacation – go ahead and raise that deductible to enjoy lower car insurance rates.

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No one wakes up in the morning planning to get into a car accident. You don't put it on the calendar between doctor's appointments and meetings at work. It just happens.

One second, you're driving along, thinking about what to have for dinner, and the next second, your heart is trying to exit your body through your throat.

This is the moment when adrenaline kicks in, logic leaves the building, and people start doing things they later wish they hadn't done.

So let's talk about what to remember after a car accident while your brain is still capable of absorbing the information and before real life decides to test you.

Picture this. You're stopped at a light. You hear a screech, then feel a thud, and suddenly your car feels like it got drop-kicked, and you're the ball. Your pulse is racing, your hands are shaking, and someone is already getting out of the other car, looking very confident about whose fault this was. Always the other person, right?

Slow down, take a breath

This is not the time to debate fault. This is not the time to apologize like you knocked over a stranger's drink in a bar. This is the time to slow everything down.

The very first thing you do is stay calm. Easier said than done, but super important. Panic makes people say dumb things, forget basic steps and skip important details. You don't need to be a Jedi Master, but you do need to be functional.

Think: Humans first, vehicles second.

Once you've confirmed that the world hasn't ended, check for injuries. Yourself first, then anyone else in your car. If someone is hurt, immediately call 911, full stop. Cars are replaceable. People are not.

If the accident is minor, the police may not need to respond. If they were to visit the scene of every accident, they would never have time to do anything else. You should definitely call them if someone is hurt or if there's serious damage or a dangerous situation, such as a blocked road.

If it's a low-speed fender bender in a parking lot, you can simply exchange information and move on.

Put your phone to good use

If everyone is OK, you can move into documentation mode by using the voice recorder or video camera on your phone. Audio is fine, but video is better. Just hit record and let it run. You're not filming a documentary or an episode of Stranger Things, so don't worry about how it looks.

The point is to create a record while events are fresh and people are still saying what they're going to say (though you should be quiet — more on this later). The recording accomplishes two things:

• It captures details you might forget later.
• It keeps the interaction calmer. Most people tend to behave better when they know there're being recorded.

Walk around your car. Walk around the other car. Get the damage from multiple angles. Get the license plates. Get the intersection. Get the skid marks, if there are any.

You want to capture all the information you can get. You are building a time capsule of what things looked like before anyone has a chance to change their story. And yes, they most certainly will and do.

Record the people, not just the cars

Now comes the part everyone forgets until it's too late. Document the people involved. Take photos or video of the other driver's license, proof of insurance and registration. Don't feel awkward about it. This is standard procedure.

If they hesitate, that's a red flag. You would be surprised to find out how other people magically claim to have been in that other car, or even driving the other car. Truly. So record the people in the other vehicle so there's a record of who was there.

Then do the same for yourself and anyone in your car. It may feel strange, but it matters. Injuries aren't always obvious in the moment. Shock masks pain, and even if you think all is well, your body and brain are not in their normal state, whatever that may be.

Having a visual record of who was involved helps later if questions arise.

Don't admit to anything

This is where people accidentally light their own legal house on fire.

Do not admit fault at the scene. Not to the other driver. Not to a witness. Not even to anyone in your own car.

You are shaken. You do not have all the facts. You do not know how events will be interpreted later.

You may think you are at fault, but you could find out later that you're not. It happens.

But if you open that door and say the words, "Sorry, my fault," you could be shooting yourself in the foot. And not just the little toe.

Report the accident to your insurance company

Once you've left the scene and your hands have stopped shaking, report the accident to your insurance company. Call them. Use their app. Call your agent or broker. Pick one and do it promptly.

Timely reporting matters. Policies require it.

Carriers can help guide next steps. Delays only create confusion and complications.

This is where a good agent or broker can make all the difference in your world. Even if you're not sure whether you want to pursue a claim, getting the accident on record protects you. You can always decide later how far to take it. You cannot rewind time and report it earlier.

If you walk away unharmed, be happy

If you can walk away from a car accident, you should be thankful — genuinely thankful. Not everyone does.

I'm speaking from personal experience here, having lost my uncle in a major accident that took him from us suddenly.

Cars are heavy, fast and unforgiving. Even low-speed accidents can turn serious in an instant.

Walking away with nothing more than a racing heart and some bent metal is a gift, even if it doesn't feel like one in the moment.

Be prepared, don't assume

Knowing what to do ahead of time turns chaos into a checklist:

• Stay calm
• Check for injuries
• Don't admit fault even if you believe you're the culprit
• Record audio (video if possible)
• Capture photos
• Document everyone involved
• Report the claim
• Breathe and thank your lucky stars

Insurance exists for these moments, for the unexpected interruption that turns a normal day into a story you didn't ask for, but no doubt you will tell your family and friends.

If you remember nothing else, remember this: After an accident, you are not there to solve everything. You are there to preserve facts and protect yourself.

Because the best accident outcome is the one where everyone goes home. Everything else is paperwork.

Want to learn more about insurance? Visit icgs.org.

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• Help! My Car Was Totaled. Should I Repair and Keep Driving It or Buy a New One?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Having car insurance is supposed to protect you after a crash, helping cover repairs and medical costs when something goes wrong.

But some recent cases in Michigan in which people were reportedly denied claims because they didn't list their children with their insurance providers are raising questions about little-known household disclosure rules that can affect whether coverage applies at all.

In some states, insurers require policyholders to list not just drivers, but everyone who lives in the household, including children. If that information is missing, even unintentionally, a routine accident can turn into a costly financial nightmare. Here’s what drivers should know about how these disclosure rules work and why they matter.

What happened in Michigan

WDIV, the local NBC affiliate in Detroit, has been reporting on cases in which people say they were denied coverage after an incident because they failed to document their children with the provider.

Insurers in Michigan often require applicants to disclose all household residents, including non-drivers, when underwriting personal injury protection (PIP) coverage. Under Michigan's no-fault law, PIP benefits attach to the named insured and household relatives, and failing to list them can affect eligibility for coverage.

The reported cases include an Oakland County driver who submitted a claim after getting in a crash while her 12-year-old daughter and her daughter's friend were in the car. The driver submitted a claim that included a police report showing children were in the vehicle at the time of the crash.

Weeks later, WDIV reported, she received a letter stating the claim would not be paid and that her policy was being canceled retroactive to her last renewal date because a nondriving child who lived in her home wasn't listed on her policy's PIP form.

How Michigan's no-fault and PIP system works

Michigan is one of a handful of states with a no-fault auto insurance system, which means each driver's own insurance pays for certain costs after a crash, regardless of who caused the accident.

Under Michigan's no-fault law (PDF), all drivers are required to carry PIP as part of their auto insurance. PIP is designed to cover medical bills, lost wages and other accident-related costs for the insured and eligible household members, no matter who was at fault.

State statute defines PIP benefits broadly: Coverage applies to the named insured, their spouse and relatives domiciled in the same household who suffer accidental bodily injury in a motor-vehicle crash. Because of this definition, insurers use household resident information to determine who is eligible for benefits under a policy.

Why insurers require all household members to be listed

When it comes to PIP coverage, car insurance companies assess risk based on who lives in the household, not just who is licensed to drive. For example, a household with multiple drivers has a greater risk of getting into a car accident than a household with just one driver.

Additionally, because PIP benefits extend to household relatives, insurers might face higher potential medical payouts in households with more dependents, including children, even if those children never drive.

As a result, insurers can require customers to disclose all household residents, and that information might be collected through applications, renewal forms or periodic verification requests. As these recent denials show, failing to provide complete household information can have serious financial consequences.

Why many drivers don't realize who must be listed on their policy

Part of the problem is that many drivers are unclear about who needs to be listed on an auto insurance policy. Some assume only licensed drivers must be disclosed, while others might not realize that children, roommates or adult children who move back home can also count as household residents under insurance rules.

There's also a lot of confusion around the difference between a temporary visitor and a household resident. Most policies allow permissive use, meaning liability and collision coverage might extend to someone who occasionally borrows your car, such as a friend visiting for a weekend.

But if that visitor establishes a long-term presence, they'll be considered a resident, and you'll need to update your insurance information to reflect that. State laws differ on the number of days that determine when a visitor becomes a resident, so it's a good idea to contact your insurance company with any questions.

Is this only happening in Michigan?

Michigan's no-fault system makes disclosing dependents particularly important, but similar household disclosure clauses exist in many states. Even where no-fault laws don't apply, insurers nationwide often require customers to list all their household residents, not just licensed drivers, though enforcement and penalties can vary.

Twelve states and Puerto Rico require mandatory no-fault insurance with PIP benefits, including Florida, Hawaii, Kansas, Massachusetts, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah, in addition to Michigan. The structure and specific requirements of PIP vary by state, however, and not all no-fault systems are identical.

Drivers everywhere should review their own policy language. Check your declarations page and any forms you've signed, and contact your insurer to correct any missing or outdated household information.

What this means for policyholders

It's important to be detail-oriented and accurate when completing any paperwork for your insurance provider. This is a good time to:

• Review your declarations page and application disclosures. Carefully re-read the instructions and make sure you've shared all relevant and required information with your insurer.
• Confirm who must be listed as a household member. If you assumed that you only needed to list drivers, double-check and contact your insurance company to make sure this is accurate.
• Notify insurers of changes in household composition. If you have a baby, get married or if an adult child moves back home again, promptly notify your insurance company so they can update your policy.

Rather than assuming your coverage rules, it's best to contact your agent or insurer directly, especially if you're dealing with a complicated situation or unusual household composition.

What to do if a claim is denied over household disclosures

If your insurer denies a claim over household disclosures, start with the following steps:

• Request a written explanation: Ask for an explanation in writing, and request your insurer cite specific policy language that explains the reason for the denial.
• Ask to correct or reinstate your coverage: In some situations, your insurer might be willing to help you correct or reinstate your coverage. Now is the time to ask for details about what changes you need to make to correct the issue.
• Consult a professional: Contact an insurance attorney or state insurance regulator for additional help. These professionals might be able to help you find a solution.

Don't delay these steps. It's important to act quickly after receiving a denial, especially if medical bills or vehicle damage are involved. These situations highlight how small details in insurance paperwork can carry major financial consequences.

For families, especially those with children or changing household arrangements, knowing exactly who must be listed on an auto policy could make the difference between a paid claim and a costly legal fight.

Need a car insurance quote? Use the tool below to explore some of today's top car insurance offers, powered by Bankrate:

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When you buy a car, the salesperson is likely going to offer up a bunch of add-ons before you drive away with your new ride. Two of the most common add-ons are extended car warranties and mechanical breakdown insurance. Both forms of optional coverage promise to shield your finances from expensive surprise repairs.

But both also come with exclusions and restrictions that are important to know about before buying either.

As the cost of cars rise, you're left wrestling with the need to keep that up-front cost down while weighing the risk of costly repairs down the road. Here's what you need to know about mechanical breakdown insurance, how it compares to an extended car warranty and whether it makes sense to buy either one.

What is mechanical breakdown insurance?

Mechanical breakdown insurance is very similar to an extended car warranty. In the first three to five years, while your car is still under a standard warranty, it acts like supplemental protection to pay for covered repairs when your warranty won't. After that standard warranty expires, you can maintain mechanical breakdown insurance for a few years longer, and it will continue to cover a lot of the same things your warranty used to cover.

The insurance is usually sold as an add-on to your car insurance. But some insurers and financial institutions will offer it as a standalone policy. Here's how the coverage works for standard mechanical breakdown insurance:

• The insurance will cover breakdown-related repairs when your standard warranty fails to cover it or after your warranty expires.
• Coverage is usually limited to internal mechanical issues, not externally-caused damage. For example, weather-related damage would be excluded (for that, you need comprehensive insurance). But if the transmission suddenly fails or your air conditioner stops working – and the failure isn't related to an external cause or to misuse on your part – your mechanical breakdown insurance may cover it.
• Most policies come with a deductible, ranging from about $50 to $250 per covered repair.
• It excludes routine maintenance costs, damage related to normal wear and tear or damage that was caused by improper maintenance. Sometimes, other parts or components exclusions also apply.

The policy requirements will vary from one provider to the next, but in general, you have to meet the following criteria in order to get mechanical breakdown insurance:

• Your car must be new, usually under 15 months old and with fewer than 15,000 miles.
• You must be the first owner of the car.
• You can renew the policy annually, but most providers won't offer coverage once the car hits 100,000 miles or is more than seven years old.
• You will need to keep up with all recommended maintenance, including oil changes and tire rotations. Without records of regular service, the insurer may deny a claim, citing improper maintenance on your part.

How much does mechanical breakdown insurance cost?

On average, expect to pay around $100 per year for mechanical breakdown insurance. Rates will vary by your car's make and model, though. If your car is more expensive to repair, the coverage will be more expensive, too.

This makes mechanical breakdown insurance a cheaper alternative to an extended car warranty, which can run between $1,000 to $3,000 total for a warranty lasting three to five years. However, the insurance comes with a deductible, while warranties don't require you to pay anything at all for a covered repair.

Mechanical breakdown insurance vs extended car warranty

As mentioned above, mechanical breakdown insurance and extended car warranties are very similar in terms of what they cover. Both give car owners a way to extend the protection that a standard car warranty provides. Both cover many of the same kinds of repairs and carry very similar exclusions.

With that said, there are a few key differences to consider if you're trying to decide which one to buy:

• Mechanical breakdown insurance is usually cheaper per year. But plan to pay a deductible for any covered repairs.
• The insurance can usually be added on to your existing car insurance, meaning you can use the same claims process you would for an accident. But it also means you'll be locked in with your current provider for as long as you want to maintain the added coverage. That means you wouldn't have the flexibility to shop around and switch car insurance to keep your premiums low.
• It can be more comprehensive than some extended warranties, as it's less likely to exclude entire systems or components.
• You can use any licensed repair shop you choose with mechanical breakdown insurance. With a warranty, you're usually required to take your car to the dealer.
• Extended car warranties are less restrictive about who can buy them. You can wait until your standard warranty is about to expire to buy it, and you can even get an extended warranty on used cars. Neither of those is possible with mechanical breakdown insurance.
• Extended warranties may last longer than mechanical breakdown insurance or offer coverage for higher mileage cars.

In short, an extended warranty tends to cost a little more (though you can and should negotiate the price), but often means $0 out of pocket for a covered repair. Mechanical breakdown insurance is usually a lot cheaper, but you'll be on the hook for the deductible for any covered repair.

Both can be rendered useless if you don't meet strict criteria. Many of the same things that can trigger a warranty to be voided can result in your mechanical breakdown insurance claim being denied. That includes things like a lack of proper maintenance or making aftermarket modifications to the car.

Should you get mechanical breakdown insurance?

To decide if it's worth buying mechanical breakdown insurance at all, you'll need to do some math. Most owners will spend around $1,000 to $1,500 over the first five years of ownership on maintenance and repairs, according to Consumer Reports. After that, costs jump to about $4,000 to $5,000 spread over the next five years.

A lot of that money, especially in the first five years, is going toward routine maintenance that you would still be responsible for, even with mechanical breakdown insurance or an extended warranty.

Meanwhile, the average repair cost after a breakdown is about $218, according to a 2019 Agero analysis. Though that's likely a little higher now with inflation and tariffs, and costs can vary widely, depending on the cause of the breakdown. Still, that means you might be on the hook even for a covered repair if it costs less than your plan's deductible.

So, in order for mechanical breakdown insurance to pay off, the repair needs to be unrelated to normal wear and tear, on a car that is up to date on all of its routine maintenance, and the covered repair needs to be higher than your deductible.

If your car were to suffer a serious breakdown requiring an expensive repair within the time frame that your mechanical breakdown insurance was in effect, you could potentially save thousands. But the odds of that happening are pretty slim.

Cars under 10 years old are about half as likely to break down in any given year as older cars, according to AAA. Keeping up with routine maintenance further reduces that risk. And some of the most common repairs a car of any age will need – like battery or tire replacements – are usually excluded anyway.

There's a high chance you'll end up paying for coverage that expires before you can use it. You'd typically be better off just skipping the mechanical breakdown insurance and saving that cash in a high-yield savings account to pay for repairs as they come up.

With that said, more expensive cars might be an exception to the rule. If you have a luxury or imported car with expensive parts, even a minor repair can end up costing thousands.

The same is true for cars with more complex technology and components. In these cases, a mechanical breakdown insurance policy could pay off. But you still need to check your policy documents carefully to make sure those costlier parts aren't excluded.

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Most people treat reporting an insurance claim the way they treat going to the dentist. They know they should do it soon, they feel a twinge of dread, and they convince themselves that waiting a little longer will somehow make things easier.

Spoiler alert: Waiting can make things worse.

Nearly every insurance policy includes a notice provision requiring you to report a loss promptly, sometimes phrased like "as soon as is reasonable," "as soon as possible" or "when practically possible."

Blow that off long enough, and you can hand your carrier a perfectly good excuse to deny your claim.

Here are the top five reasons why reporting your claim fast is important.

Reason No. 1: Your policy requires prompt notice

Insurance is a contract. Not a vibe, not a handshake. An actual contract between you and your insurer. If you want the insurer to follow their part of the contract, you have to follow yours.

A policy usually says that when something bad happens, you must notify the carrier promptly.

If you wait too long, the insurer may argue late notice and deny coverage, especially if the delay harmed their ability to evaluate the claim or caused additional damage to occur.

This is even more critical with claims-made policies, which are common in professional liability coverage.

With those, coverage isn't just about when the event occurred. It's about when the claim is made and reported.

Miss that window, and you can be out of coverage even if everything else is legit.

Bottom line: The policy language telling you to report claims promptly isn't a friendly suggestion — it is a requirement.

Reason No. 2: Early reporting lets the carrier help stop the bleeding

Losses have a bad habit of getting worse if you don't do something about them. Some policies' language specifically states that you must do what a prudent person would do in order to prevent further loss or damage.

A small water leak could become a mold circus. A wind-damaged roof could turn into a soaked attic the next time it rains. A stolen catalytic converter could lead to more theft if the car sits outside unrepaired.

Carriers have vendor networks, mitigation pros and claims reps whose job is to help prevent further damage once a loss happens.

Remember that you and the insurer are aligned here — neither one of you wants more damage to happen.

Reason No. 3: It preserves evidence and allows for a cleaner investigation

Insurance claims are part storytelling, part proof. The longer you wait, the more the story gets fuzzy and the more likely the proof gets harder to come by. Facts fade, and that's no good.

Adjusters need to see things close to how they were right after the loss. Water dries. Debris gets hauled off. Damaged items get tossed. Scene conditions change.

When notice is late, insurers can argue they were prejudiced because they couldn't investigate properly, which becomes fuel for denial or dispute. Again, easy to avoid.

Think of it like trying to take a photo of a car accident three weeks after the cars have been towed. And yes, I've seen people try to reconstruct their accident because they didn't take pics when it happened. More than once.

Quick reporting means the carrier can document damage, verify cause and move the claim forward without having to guess what happened.

Reason No. 4. It speeds up your payout and your repair timeline

This one is painfully simple: The claims clock doesn't start until the insurer knows the claim exists. I call this the wait-and-hurry-up process. You wait to file your claim, but then you want the insurer to hurry up to cover it.

Prompt notice lets the carrier open a file, assign an adjuster, schedule inspections and authorize repairs. The sooner that starts, the sooner you get paid and the sooner your life returns to normal.

And if that isn't enough to sway you, consider that delays don't just create paperwork issues. They create real-world issues:

• Contractors might be booked up
• Temporary housing may no longer be available
• Your rental car coverage may no longer apply
• Inflation could push repair costs up even higher

Reason No. 5: It protects you from fights over coverage

Late notice is one of the most common openings for coverage disputes. Period. And it's one of the easiest to avoid. Most insurers let you report a claim by making a call or even using a smartphone app.

So what does "timely reporting" actually mean?

Policies rarely give a perfect number for every scenario. You'll see language like "promptly," "as soon as practicable" or "within a reasonable time."

That flexibility is not a gift you should interpret as "take your time." It's meant to account for real life — hospital stays, evacuation, emergencies. Don't create an excuse for a problem later.

A good rule of thumb:

• Report as soon as you are safe and able
• If you are unsure whether it's a claim, report it anyway. Many carriers can open an incident file without forcing you to proceed or counting it as a claim. Be sure to ask your insurance agent or broker about this.

There is almost no downside to reporting a claim early. There can be a massive downside to reporting late.

Common excuses for delays and why you shouldn't use them

I've heard these reasons for not reporting a claim:

• They hope it will be cheap to fix themselves
• They don't want their rates to go up
• They are embarrassed
• They are busy
• They don't want to deal with the process
• Their spouse said they'd do it but didn't

I get it. But none of those reasons will cost you more than losing coverage entirely or paying for preventable extra damage out of pocket.

If you are worried about the potential impact on your premium, talk to your licensed insurance agent or broker before you decide to file a claim. But don't let fear of a maybe lead to a guaranteed problem.

Here's what to do when a loss happens:

• Make it safe. Stop water, secure property, get medical help
• Document quickly. Photos, video, receipts, names, dates
• Notify the carrier. Same day if possible, certainly within days
• Follow instructions on mitigation. Keep receipts
• Stay responsive. Claims move at the speed of cooperation

The fastest way to turn a covered loss into an uncovered one is to treat the notice requirement like it's a suggestion.

Want to learn more about insurance? Visit icgs.org.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

These days, it seems as if every other TV commercial is for yet another insurance product. While consumer choice can be a good thing, not all insurance is as essential as ads make it seem.

Although insurance plays an important role in anyone's financial plan, some products might be more about protecting the insurance company's bottom line rather than yours. Insurance decisions shouldn't be made in a vacuum.

You should consider your entire financial picture. That way, you can identify the gaps and figure out the coverage you truly need, along with any you could do without. It's also important to do an annual insurance review, as certain life events or milestones can change your insurance needs.

Above all, never buy insurance hastily based on fear, especially if it involves the products on this list.

If you're renting a car in the United States, decline that additional insurance the rental car company is trying to sell you. If you already have a standard car insurance policy, it'll cover you when you're driving the rental. You don't need rental car insurance.

If you're driving abroad, you still might not need to opt into the extra coverage if you book with one of the many credit cards that cover rental car insurance.

The same might also apply to rental car reimbursement coverage. This is an optional type of car insurance that would pay for a rental car while your car is being repaired.

But if you live in a multicar household, consider whether you need rental car reimbursement coverage. It might be a hassle to borrow your spouse's or your teen's car for a few days while your car's in the shop. But the lower premium you'd enjoy by dropping that coverage could be worth it.

As risky as it might sound, there's a point at which you shouldn't bother paying for more than the minimum car insurance required by your state.

If your car is older or has otherwise lost most of its market value, you'd likely be better off dropping things such as collision insurance or comprehensive insurance.

The most your insurance company will ever pay is the current market value of your car. Meanwhile, dropping to minimum coverage could save you a thousand or more per year.

At a low enough market value, it makes more sense to pocket those premium savings than to pay for full coverage that would only ever pay a few thousand dollars.

If you've splurged on your dream vacation, you (rightly) feel as if you shouldn't expose yourself to the risk of canceled flights, closed hotels or other unexpected emergencies.

Travel insurance is a great way to make sure you'll get your money back if anything goes wrong. But, if you've got the right travel rewards card, there's a good chance you have some basic protections already.

More credit cards are offering basic trip cancellation coverage and, sometimes, even throwing in lost or damaged baggage insurance.

Depending on your trip and how you book, you might need to buy supplemental coverage for things such as medical emergencies or a cruise-specific policy if your credit card's travel insurance isn't enough. For quick weekend trips or low-cost vacations, your credit card's coverage is probably enough.

If you're still working but nearing retirement, consider whether your long-term disability insurance is worth keeping. The premium for an employer group plan typically increases with age.

The policy also will limit the payout period until a particular age, such as 65. As this age nears, your maximum possible benefit shrinks. This is especially true for someone who could have retired earlier but is still working.

If you've got a fully funded retirement, you're no longer dependent on your salary. The higher insurance bill might not be worth the dwindling maximum payout, especially if it's just protecting income you could technically live without.

A stroke, heart attack, life-threatening cancer and an organ transplant are just some of the serious health issues that critical illness insurance covers. If you develop one of these conditions, the insurer sends you a lump sum cash payment, ranging from $10,000 to $50,000, that can be spent however you want.

Despite this flexibility, it's not always as useful as it seems. Your health insurance will already put some limits on your out-of-pocket costs in these scenarios.

Before paying for this added layer of protection, review your potential out-of-pocket costs for health insurance to see whether you need critical illness insurance or if you could manage the bills with savings.

All the dysfunction and uncertainty in Washington has led to a new product: Social Security insurance. It's a type of annuity, an insurance contract that turns part of your savings into future income.

When you add this insurance to an annuity, the insurer promises your annuity payment will increase to cover any government shortfall that results in a smaller Social Security benefit.

However, the odds of that happening, at least in the near future, are slim. Retirees have strong voter turnout. More than half of the voters in 2020 and 2024 were 50 and older, and 28% were 65 and older, according to the Pew Research Center.

Cutting Social Security benefits when such a large chunk of those who turn out to vote are either collecting Social Security or planning to do so soon would be a huge risk for anyone hoping to get re-elected.

While you might be used to having them when your employer is subsidizing premiums, individual dental and vision policies might not be worth buying after you retire.

Without those employer subsidies, the cost of this coverage will skyrocket. Not only are premiums higher for individual plans, but they could also have high out-of-pocket costs for care, an exclusion of major services for the first year of coverage and a limited annual coverage limit.

Instead, you might be able to pay less per year on vision and dental costs by simply paying cash. Some providers might offer subscription plans that include all your preventive care for a low monthly price that would be lower than an insurance premium.

You can also look into alternatives such as dental savings plans, in which you get access to heavily discounted services for a low annual fee.

Say you've got term life insurance that will provide a $500,000 payout to your beneficiaries if you pass. Once you hit $500,000 in retirement savings, you can consider dropping the insurance and just designating your beneficiaries as heirs to your retirement fund.

However, if your family would need the cash right away, one benefit of life insurance is that the proceeds aren't taxable, while an inherited 401(k) is (if they withdraw it rather than rolling it into another retirement account).

If you want to drop life insurance but make sure your family receives the full $500,000 payout, you can wait to cancel your policy until your 401(k) balance is high enough that your family would receive $500,000 after taxes.

No one disputes that long-term care in the United States is an expensive risk. A private room in a nursing home costs more than $90,000 a year, on average, according to the U.S. Department of Health and Human Services.

Still, traditional long-term care insurance policies have high premiums that make them hard to justify. As you get older, those high premiums get even higher. Because it only applies under such narrow, specific circumstances, the hefty cost is usually not worthwhile.

As an alternative, you can look into a long-term care hybrid (LTC-hybrid) life insurance policy. With these policies, if you don't end up needing long-term care, your heirs will receive the cash as a death benefit instead. Your premiums aren't going to waste on a policy that never gets used.

Before buying even a hybrid policy, do the math on how much long-term care would cost. For example, some expenses, such as food, housing and utilities, would be provided by the long-term care facility.

Even when one spouse enters long-term care while the other remains in the couple's home, some daily living expenses are still reduced. If you're considering long-term care insurance, ask yourself whether you need to cover the full cost of a nursing facility or if you could go with a partial benefit that's more affordable.

Although the classic example is rental car insurance, there's often a fair amount of overlap with the insurance people have. Your car insurance covers medical bills after a car accident, but so could your health insurance.

Your home insurance covers liability for an injury on your property and so does an umbrella policy, which should offer enough supplementary coverage, if needed, to protect your net worth.

Given this overlap, it's possible that the limits on your existing policies are higher than necessary because they cover the same risk. If you have umbrella insurance, for example, drop your liability coverage on other policies to the minimum required.

While insurers usually require a certain amount of liability coverage on your home or car insurance before they'll offer an umbrella policy, there's no reason to go above that requirement.

Another sneaky way you end up paying for redundant coverage is when life events render your policy redundant. If your teen moves out for college and gets their own car insurance, for example, there's no reason you should pay the added cost of keeping them listed as a driver on your policy.

Review your insurance policies regularly and think about whether you still need the coverage for which you're paying. The money you save by slashing unnecessary premiums can go toward boosting your emergency fund or toward paying for better coverage in the areas you do need it.

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When you think of natural disasters, you probably think along the lines of hurricanes on the East and Gulf Coasts, earthquakes and wildfires out West and tornadoes in the South and Midwest.

But that mental map is about as current as knowing all of your neighbors by name. (And don't pretend you do.)

The last couple of years have been a master class in geography-free chaos: near-historic tornado seasons in the central U.S., catastrophic hurricane-driven flooding pushing far inland, repeated flash floods in places that used to call such flooding a once-in-a-generation event and a West Coast fire season that seems to never quite clock out.

So yes, even if you live somewhere that "doesn't get" natural disasters, you need to prepare for them. Because they can happen anywhere now.

Old-fashioned insurance buying

A lot of people still buy insurance like it's the 1990s. The logic sounds familiar:

• "That doesn't happen here."
• "My house is built on granite."
• "My house was built in the 1920s and is still here, so it ain't going anywhere."

While those thoughts might have been logical in the past, they aren't anymore.

NOAA counted 27 separate U.S. disasters costing $1 billion-plus in 2024 alone, and the recent five-year average is more than double the long-term average. Translation: Big disasters aren't rare events these days — they're recurring guests who don't bring wine, cookies or snacks. #rude

Let's start with fire and floods

On the West Coast, the big headline is still wildfire. California logged thousands of fires in 2025 and hundreds of thousands of acres burned.

Even if your house isn't in the bull's-eye, fire creates secondary risks, like smoke damage, the effects of shut-down utilities (such as power and water) and the always-rising costs of post-fire recovery.

Then there's water. Atmospheric rivers — and I can't believe I'm using that term — and intense winter storms have turned formerly "dry" areas into surprise swimming pools with zero warning. The West Coast now swings between drought and deluge like a pendulum with a grudge.

Hurricanes and other storms

On the East Coast, the story is not just hurricanes hitting the shoreline. It's hurricanes dragging biblical-level rain hundreds of miles inland. Noah could have brought his Ark right into your backyard.

In September 2024, Hurricane Helene made landfall on Florida's Gulf Coast as a Category 4 storm, then produced unprecedented inland flooding and landslides across the southern Appalachians.

Communities far from the beach took catastrophic losses. Many of those people no doubt thought that couldn't happen to them, and yet …

A month earlier, Tropical Storm Debby hit Florida and South Carolina, then soaked the Carolinas and dumped heavy rain into the Mid-Atlantic and Northeast, triggering flash floods. Surprise again.

And if you think, "That's still coastal-adjacent," you might want to talk to folks in Vermont. They had repeated flash floods during the summer, including major events in July 2024 and again in 2025.

Don't forget tornadoes

Mother Nature doesn't ignore our fellow Americans in the central U.S. Those areas have seen tornado seasons that are both high-count and high-intensity.

Our NOAA friends called 2024 a near-historic year for tornadoes, with the second-highest count on record. A multistate "superstorm" outbreak in March 2025 produced more than 100 tornadoes and major damage in the Mississippi Valley.

On top of tornadoes, hail and straight-line wind events are wrecking roofs, siding and cars in places where people used to say, "We just get thunderstorms."

You don't prepare for disasters because you're dramatic or a catastrophist. You prepare because disasters are basically happening everywhere you want to be.

And this leads me to one other fact: When you see a national weather map with lots of activity on it, then you can expect that more insurance claims are going to happen. That means more insurance claims, and more claims mean higher insurance premiums.

It isn't personal, or price-gouging, it's just math.

Check out these Kiplinger articles for information on how to prepare yourself and your home for disasters:

Everyone Needs to Prepare for Earthquakes, Even if You Don't Live Near a Fault Line

How to Prepare for a Hurricane and Other Natural Disasters

How to Prepare for an Emergency

Retirees, Be Prepared for a Natural Disaster

Is Your Home Disaster-Ready? An Insurance Expert's Guide to Preparing for Storms and Fires

How to Protect Your Home from Natural Disasters with the Right Insurance

How to Save Financial Documents and Information in Case of a Storm or Wildfire

14 Must-Have Items for Your Home Emergency Kit

Hurricane Insurance Claims: 10 Things You Should Know

Post-Disaster Financial Planning: How to Protect Your Assets

Want to learn more about insurance? Visit icgs.org.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Question: My teen crashed his car and now our car insurance has tripled. What can we do to cut our insurance bill?

Answer: Unfortunately, there's no quick fix to undo the financial damage of a teen driver getting into an accident. Whether your car was totaled or it was a minor fender bender, a teen driver getting into an accident is likely to result in a steep premium increase.

Some tips and tricks can help counteract the rate hike, but nothing (aside from time and eventually removing them from your policy) is likely to completely erase it.

With that said, you have some options for how you navigate this situation with your teen. Even if these tips and tricks can't completely cancel out a post-crash rate hike, they can help soften the blow.

Here are some of your best options after your teen's car accident.

Ask your insurer about accident forgiveness programs

Some insurance companies offer accident forgiveness, which lets you avoid the rate increase that typically follows your first at-fault accident.

These programs often have restrictions, such as a clean driving record or a certain number of years with the insurer. It’s still worth calling your provider to see if they offer it and whether your situation would qualify.

Switch your car insurance

If your insurer doesn't offer accident forgiveness or you're not eligible, now might be a good time to switch your car insurance. Don't expect to find drastically lower rates from another company, as they'll still be able to see your teen's accident history. But every little bit helps when your premiums are soaring.

As you shop around, ask about accident forgiveness programs before you switch. Some companies might offer retroactive forgiveness after you meet certain criteria.

Have your teen pay the overage

You might not be able to substantially lower your premium, but you could at least avoid paying for your teen driver's mistake yourself. If they were at fault, use this accident as a teachable moment, and have your teen cover the added costs to insurance.

If they don't currently earn any money from odd jobs or part time work, this could be the time to have them find something. If that's not an option, you might come up with a system in which they do extra chores around the house to "pay back" the premium hike.

Have your teen take a defensive driving course

A defensive driving course is a good idea for any driver, as many insurers will offer a discount to policyholders who've taken one. It's a good way to demonstrate your commitment to safe driving.

While the discount is going to be small in comparison with the post-accident rate hike, every little bit helps. It's also a good way to teach your teen better defensive driving skills so that they can avoid accidents in the future.

Consider alternative ways to lower your premium

The accident, especially if your teen was at fault, is going to jack up your premium. There's no way around that. But, you can counteract the rate hike by taking advantage of other cost-cutting strategies.

For example, some car models cost more to insure than others. If the car your teen is driving is one of the more expensive models, you might consider trading it in for something more modest.

If your teen wasn't at fault, you might want to consider either raising your deductibles or temporarily dropping collision and comprehensive coverage on the car your teen drives. Both of these increase your risk exposure, but if you need to cut your monthly budget and you trust your teen, this is an option to consider.

Eat the cost, and wait for your teen to turn 18

Accidents remain on the Comprehensive Loss Underwriting Exchange (C.L.U.E) database that most major companies check before offering coverage for up to seven years. But, luckily for you, your teen can get their own car insurance once they turn 18. And, after they move out, you'll be able to remove them from the list of drivers on your policy.

If you worry a part time job in high school would take too much time away from their schoolwork, you can eat the cost for now, then let them know that when they turn 18, they're either getting their own policy or they're paying the excess premium on your current policy. This gives them time to make plans for the expense.

Do not remove your teen from your policy

In most states, a car insurance policy must list every licensed driver living in your household, even if they're never going to drive your car. You won't be able to remove your teen from your policy, even if you've taken away their driving privileges.

Even if you live in a state where that isn't required, it's still not a good idea. If your teen sneaks out for a joy ride and gets in another crash, your claim could be denied if they weren't listed on your policy. You'll be stuck paying for the other driver's damages and any potential lawsuit out of pocket.

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• Should You Get Home or Car Insurance Through Costco?

Car ownership has gotten a lot more expensive. From January 2020 to August 2025, ownership costs surged by 41%, according to an index from Navy Federal Credit Union. That compares with a 25% climb in overall consumer prices over the same period, based on the consumer price index.

Steep increases in auto insurance premiums following the COVID-19 pandemic have been a major contributor. Costs for auto repairs have swelled, too, up 15% year over year in August, according to CPI data. Tariffs of 25% on imported car parts are driving up repair costs, as are more-complex repairs for vehicles packed with advanced technology, such as sensors that assist with blind-spot monitoring or warn you when you drift out of your lane. After a crash, fixing damage to these systems can add up to 37.6% to repair costs, according to AAA.

To mitigate ballooning car ownership expenses, try making these moves.

Consider ownership costs when you choose a car

As you decide which model to buy, think beyond the purchase price. Picking a vehicle with solid fuel economy rather than a gas guzzler could save you hundreds of dollars a year. You can select vehicle models and compare their fuel economy and estimated annual fuel costs at the U.S. Department of Energy’s fueleconomy.gov (in the “Find & Compare Cars” section, click on “Compare Side-By-Side”).

Reliability ratings of car brands can help you determine the likelihood of a car needing frequent repairs. In its most recent assessment of vehicle dependability, which tracked problems in the first three years of car ownership, J.D. Power found that Lexus rated highest overall. Among mass-market brands, Buick, Mazda and Toyota topped the rankings.

With online calculators, you can assess a car’s overall ownership costs. The tool from automotive-research site Edmunds estimates a car model’s total five-year costs, including insurance, maintenance, repairs, fuel and other factors. At Kelley Blue Book, a vehicle valuation and research company, offers a tool that lets you do a side-by-side comparison of five-year costs for various models.

Manage the ongoing expenses

If you haven’t compared quotes on auto insurance policies in a while, it’s worth shopping around; you can gather quotes on sites such as Policygenius.com and TheZebra.com. Take advantage of any discounts you qualify for, such as for automatic bill payments or low annual mileage.

Stay on top of routine maintenance, such as oil changes and brake inspections, to help avoid costly repairs down the road. You may spend less at an independent garage or oil-change shop than at the dealership, according to Edmunds (although certain tasks, such as work on sophisticated electronic systems, are best performed at the dealer). Look for coupons or specials that offer discounts on maintenance services.

When you buy gas, use an app such as GasBuddy to check for the lowest prices at stations near you. Some credit cards provide extra rewards on fuel purchases. The Costco Anywhere Visa Card by Citi, available to Costco Wholesale members, offers 5% cash back on gas purchased at Costco and 4% on fuel you buy elsewhere (you’ll earn those rates on a combined $7,000 in annual fuel spending and 1% thereafter).

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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If you drive, chances are you’ve been buying cars your entire life. You already know the buying experience inside and out.

“At this stage of life, most of my clients just want everything to be convenient and hassle-free,” says Adam Rex, a financial planner with Cornerstone Financial Services in Virginia Beach. Unfortunately, the vehicle market has some new headaches thanks to supply chain issues, tariffs and changes in vehicle technology.

Whether you’re planning to buy soon or exploring options for the future, here’s what to know about purchasing a car today.

1. Prepare for sticker shock

The average price of a new car just hit over $50,000, according to Kelley Blue Book. “There were steep price increases after the COVID-19 pandemic, and prices remain at an elevated level,” says Chase Gardner, data insights manager at Insurify, an online car insurance quote marketplace.

2. Consider going for a 'budget' test drive

Given the skyrocketing prices, monthly payments have also gone up. You can get a feel for your expected loan payment using a website like Calculator.net.

Consider a budget “test drive,” says Rex. “For a few months, set aside what you expect to pay on the new car and see if it’s doable.” Don’t forget about adding money for insurance, registration and maintenance. At the end of the test, you’ll have extra cash for a down payment.

It’s especially important to plan ahead if you’ve recently retired on a fixed income and have a different household budget than when you were working. The number of people struggling and missing car payments is climbing quickly for consumers of all income levels because of high prices and interest rates. Avoid getting locked into something uncomfortable.

3. Leasing simplifies things

As always, when getting a new car, the question is whether to buy or lease. When you buy, payments start higher, and you’re responsible for more repairs and maintenance. But after you pay off the loan, payments stop. Plus, you can later sell the vehicle or trade it in.

Leasing is a long-term rental, so the payments never end. However, you can regularly replace your vehicle with a new model every few years at the end of each lease, and you don’t have to repair damage from normal wear and tear.

Given the tradeoffs, Rex finds leasing to be a more convenient fit for retirees, especially if they plan to continue driving for only a few years. “When it’s done, you just hand the vehicle back to the dealer. There’s no hassle of selling,” says Rex. Just be aware of any mileage caps and restrictions if you drive a lot. For snowbirds who go between New York and Florida every winter, leasing is probably not the right fit.

4. Weigh financing versus paying out of savings

If you’re going to buy, think about whether it could make sense to pay off the entire vehicle at once using your savings.

Paying up front means you don’t have an ongoing loan payment and won’t be charged interest. On the other hand, you no longer have the money to invest. If you make a lump sum withdrawal from a pre-tax traditional Individual Retirement Account or 401(k), the entire amount will be taxable, could push you into a higher bracket and create surcharges on your Medicare premiums.

Borrowers with strong credit scores (650+) today pay between 5% and 7% for a new car loan, while subprime borrowers face double-digit interest rates. “If your investments are earning more than your quoted loan rate, financing could make sense,” says Rex, the financial planner from Virginia Beach.

5. Your loan interest could be deductible

A new provision in the One Big Beautiful Bill Act allows taxpayers to deduct up to $10,000 per year in car-loan interest from 2025 through 2028 on new, U.S.-assembled vehicles. Used car purchases and leases don’t qualify.

You can claim this tax break even if you use the standard deduction, making it more accessible than deductions that require itemizing. If you paid off your home and no longer qualify for the mortgage interest deduction, this new tax break can help make up the difference. The loan interest deduction does phase out for individuals with a modified adjusted gross income over $100,000 and for married joint filers with an MAGI over $200,000.

6. Consider comfort and convenience

When researching and test-driving, think about whether a vehicle would make your life easier and keep you safe on the road. “For most retirees, the best vehicle choice is a small SUV or midsize sedan,” says Gardner from Insurify. “They’re easy to park, have a higher seating position and offer great visibility.”

If you spent your career driving a high-powered sports car or dreamed your whole life about getting one in retirement, ask whether this is the wisest move. They’re expensive to repair and less reliable. “No one wants to worry about a car breaking down on the way to a doctor’s appointment,” says Rex.

The faster speed increases the chances of an accident, especially if your reaction time is not what it used to be. Plus, since sports cars are lower to the ground, they are harder to get in and out of.

7. New tech can keep you safe, but also create headaches

If it’s been years since you bought a car, you might be taken aback at how much the technology has changed. And often, not in a good way: distracting touchscreens instead of physical buttons, facial recognition instead of keys to start the car, and even pop-up video ads in some vehicles.

Not all innovations are a step in the wrong direction. Some have come a long way to reduce accidents, especially for tired and fatigued drivers: automatic emergency braking, blind-spot monitoring, lane-keeping assistance and backup cameras.

Still, even these safety features take getting used to. The typical 15-minute test drive might not be enough to really see if a car is a fit for your style. If you have your eye on a specific model, consider renting it for a weekend before deciding.

8. Understand car insurance costs

Car insurance rates skyrocketed after the COVID-19 pandemic, something you certainly noticed with your current bill. Even though rate hikes have slowed, premiums remain high. Keep this in mind when deciding what to buy.

Newer cars are more expensive to insure than used ones, because they have more costly parts and technology. Sports cars are also more expensive to cover, given the additional risk of a crash. You’ll enjoy an insurance discount when you start retirement, but only to a certain point.

“Drivers in their 60s enjoy the lowest average full-coverage premiums, about $155 per month,” says Gardner. “For drivers in their 70s and beyond, rates creep up as insurers factor in slower reaction times.” You can lower costs by taking a defensive driver’s course or using a pay-by-the-mile insurance policy if you aren’t on the road often.

9. Downsizing simplifies things

If you own multiple cars from when the kids were living at home, ask whether you still need more than two, or even more than one. Giving up one of your cars in retirement can lead to real savings. Each vehicle increases costs for registration, insurance and maintenance even if they aren’t being driven often. Demand for used cars is extremely high, making it a seller’s market. You may be surprised by how much you get for your old vehicles.

10. Tariffs will drive up prices even more

The $50,000 record car prices don’t reflect new tariffs, as dealers haven't fully priced those in yet.

Tariffs are highest on European models, making Japanese and American vehicles comparatively affordable. Still, prices for American models could climb too, since many rely on imported parts or are partially manufactured abroad.

While you shouldn’t rush a purchase, the current landscape creates some urgency. “Tariffs will likely increase prices by another 10% to 25%. If you’re thinking of buying a car within the next couple of years, acting sooner could make sense,” says Gardner.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

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Insurance companies care about fault. And I mean fault in almost every way conceivable.

Let me highlight five ways in which fault matters and what you can do (in some of the cases) to help ensure that you don't get canceled by your insurance company.

1. Premium payments

Whether you pay your insurance bills online or by mail or you walk through the door of your insurer's office and hand over cash (yes, some clients do this), paying your premium is your responsibility.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Even if your bank fails to send the payment you set up through them, while it may not be your fault, your insurance company will most likely hold you responsible (there could be some exceptions, though).

Same deal with your credit card. Say you have to cancel your card because you lost it or it was stolen, and then you forget to update your payment info with the insurer. If a premium payment gets kicked back because the account is no longer active, that is on you.

What you can do: Ensure all payment info is up to date when you set up the payment and check to make sure the payment was made on the date that you requested.

2. Risks to your home

If your next-door neighbor doesn't maintain their landscaping and that results in a tree hanging over your house, your insurance company will likely see that as a risk they do not want to take and non-renew you.

It may not be your fault — it is not even your tree — but if the tree could fall on your house or catch fire in a wildfire, that makes you a higher risk.

What you can do: Unfortunately, there's not much you can do here other than politely ask your neighbor to address whatever landscaping is putting your property at risk. The key word here is "politely."

3. Application mistakes

You may not be the one who completes your insurance applications. Your significant other might do it, for example. Or you may have an assistant who does it if you are a small-business owner. Maybe all you do is sign the insurance applications.

But what if that other person makes a mistake on the application? What if they list something materially wrong that would impact whether you would qualify for the insurance plan at a particular price?

Well, it doesn't matter. Your John Hancock at the bottom of the form confirms you understand and agree with everything above. The mistake isn't your fault, but you own it with your signature.

What you can do: Make sure you carefully read over any applications before you sign them.

4. Concentration risk

An aggressive insurance company writes up a ton of business in your neck of the woods. It seems like everyone on the street has insurance with the same insurer because someone at the company identified your area as a good one to insure, and life is good.

Unfortunately, that person leaves the company, and her replacement sees only one thing — a high concentration of risk in the same area.

Chances are, the new person is going to start removing some of those risks so the company is not in the position that one large loss in your area could set its claims pocketbooks on fire.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Not your fault — you didn't decide to approve all of your neighbors with the same insurance company, but you may still get a non-renewal notice.

What you can do: Not much you can do here, since you might not know that you and all of your neighbors have the same insurer.

5. Conflicting narratives after an incident

After being involved in a car accident, you might note that at least all involved are fully intact, except maybe the vehicles. Your next thought may be that this mess wasn't your fault.

Determining fault in a car accident can be a real challenge. What may seem cut-and-dried to you may not seem the same to the insurance company. If it comes down to "he said, she said, they said," what happens then?

You may be looking at a 50/50 determination of fault, and guess what? That means what happened is at least half your fault.

What you can do: The best thing you can do to be proactive here is to drive carefully.

The bottom line is, even when something seems completely out of your control, your insurer expects you to be proactive about managing the risk.

By double-checking your payment details, addressing potential hazards to your home and reading every document before signing, you can make it harder for your insurer to decide you're too risky to keep around.

Want to learn more about insurance? Visit icgs.org.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Being a loyal customer is usually considered a good thing.

Many brands reward loyalty with discounts, perks or special offers that make you feel valued for sticking around. It’s a relationship built on trust and the idea that long-term customers should benefit from their commitment.

But when it comes to car insurance, that loyalty can sometimes work against you. Staying with the same insurer year after year might be costing you more. Instead of rewarding your consistency, some insurance companies quietly raise your rates over time.

This practice, often called a loyalty penalty, means you could be paying higher premiums simply because you haven’t switched providers. The increases can be subtle, building year after year until you’re overpaying without realizing it.

What's the car insurance loyalty penalty?

Some car insurance providers use price optimization, a strategy that determines the highest price you’re likely to tolerate before switching companies. Insurers use data analytics and algorithms to adjust your premium based on your behavior, including how long you’ve been a customer and whether you pay on time.

If you’ve stayed with the same insurer for years, you might notice your premiums steadily creeping up. Some increases are normal, driven by factors such as the rising cost of vehicle repairs or the growing risks posed by severe weather.

According to the U.S. Bureau of Labor Statistics (PDF), car insurance rates rose 4.7% from August 2024 to August 2025. But if your premiums are climbing faster than that, you might be paying a loyalty penalty.

Before assuming loyalty is to blame, look for other reasons your rate might have increased. Buying a newer, more expensive car will raise your premium because it costs more to repair or replace. Being at fault in an accident or getting traffic tickets can also increase your rate since your insurer sees you as a higher-risk driver.

If your rates are rising beyond what’s typical and there’s no clear explanation, it might be time to shop for a new policy.

What about car insurance loyalty discounts?

You might feel as if you’re getting a great deal because your insurer offers a loyalty discount, a percentage off your premium for staying with the company over time. These discounts usually increase after you have been a customer for a few years, typically around the three-year mark.

However, a loyalty discount doesn't always mean you're saving money. In some cases, it can hide the fact that you're paying more overall.

If your insurer has gradually raised your base rate, even a discount might not offset the higher premium and you could still be overpaying for car insurance.

How to avoid the loyalty penalty

To avoid paying a penalty, make a habit of shopping around for car insurance with other companies. Try to compare rates at least every two years.

Shopping for insurance can help you find new programs, lower rates available to new customers, even new insurance companies that have entered the market. If you have kept a clean driving record or gained more experience behind the wheel, you might also qualify for lower rates.

When comparing quotes, gather estimates from at least four or five companies. Be sure the coverage types and limits are the same so you're comparing fairly. Research the reputation of each company you're considering.

This is also a good time to call your current insurer and request a policy review. Explain that you're thinking about switching and share the rates you've been quoted. Your insurer might be willing to lower your premium or find additional discounts to encourage you to stay.

Explore and compare some of today's best car insurance offers with the tool below, powered by Bankrate:

What to know before you change car insurance

While switching car insurance might help you get a lower rate, it’s important to consider a few factors before you make the switch:

• Loss of bundling discount: If you’ve bundled your car insurance with another policy, like homeowners insurance, you’ll lose that discount when you switch your car insurance to another company. Bundle discounts can be significant, so you might want to shop around for a new insurance company that offers both policy types.
• Cancellation fees: If you’re changing car insurance providers in the middle of your policy term, your old insurance company might charge you a cancellation fee. Contact your insurance company ahead of time to ask about that fee. Depending on how much you could save on insurance, it might be worth it to cancel the insurance and pay the fee. Alternatively, you could wait until your policy comes up for renewal and change providers then to avoid the cancellation fee.
• Coverage lapse: Depending on when you schedule your new policy to begin, it’s possible to create a lapse in coverage where your old policy ends before your new policy begins. Even if that lapse is just for a day, insurance companies see it as a red flag and might raise your rates. To be safe, schedule your new policy so it starts at least a day before your old policy ends. If you’re switching insurance providers in the middle of your policy, only cancel your old insurance policy once your new policy has gone into effect.

If you suspect you’re paying a loyalty penalty, taking the time to shop around for car insurance could help you get lower car insurance rates.

Even if you’re not paying a penalty, many insurance companies offer lower introductory rates to new customers, so making a change could still pay off.

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If you have a car, you're probably getting flooded with calls, emails and letters telling you that your car needs an extended warranty. A lot of these are scams, but extended warranties themselves are real and sometimes useful.

While you might be reluctant to pay the added cost, some of these sales materials can make it sound pretty scary to drive without one. But, if you don't check the fine print or choose a reputable warranty underwriter, you could end up paying for coverage that doesn't quite live up to your expectations.

How do extended warranties work? Do you really need one? What should you consider if you are going to buy one? Get the details you need to know below.

How do extended warranties work with new cars?

When buying a new car, you might be offered an "extended" or "wrap-around" warranty. Whether it's worth it depends on what the standard warranty already included with your new car covers.

This varies by make and model, but typically a standard warranty lasts about three to five years or 36,000 to 60,000 miles. In terms of what they do, there are a few things to understand before signing:

• Normal wear and tear is never covered. All warranties only cover defects or damage that aren't considered normal wear and tear. So, something like worn-out brake pads will be on you to replace.
• Covered components: Some warranties might be "comprehensive" or "bumper-to-bumper," meaning all parts and systems are covered. Others might apply to specific systems like the powertrain, infotainment system or battery.
• Owner responsibilities: Often, warranties come with the condition that you keep up with routine maintenance like oil changes and tune-ups. If you fall behind, the warranty could be voided.
• Exclusions: Even if a certain system is included, some specific components of it might be excluded, or there might be certain situations in which they'll be excluded. Read through these exclusions carefully.
• Upgrades can lead to denied claims. If you take it to a shop after the fact to modify it in any way, dealerships may claim the upgrade caused the defect and deny your claim. Something as simple as swapping the tires or installing a hardwired dash cam may be enough to cause problems
• "Abnormal use" won't be covered. Even if you have a car made for off-roading, your warranty may not cover damage that happens if you actually take it off-road. In some cases, doing anything more than normal street driving could void the entire warranty.

An extended warranty, meanwhile, would work the same as your standard. The difference is it either includes things that are excluded from your standard warranty or that it extends the time that your vehicle is covered.

How do extended warranties work with used cars?

Unlike a new car, buying a used car usually doesn't come with a warranty. One exception to that is a certified pre-owned car, which is certified by the dealer to meet certain standards and will sometimes come with an extended warranty to back that up.

For the most part, used car warranties work the same way. But there are a couple of unique features that you might find:

• Waiting periods. Sometimes, used car warranties won't kick in right away. Instead, they take effect 30 to 90 days after purchase. The waiting period might instead be a mileage, like 1,000 miles.
• Preexisting conditions. Any issue that existed before the warranty was purchased is often excluded. If you bought the warranty when you bought the car, it can be hard to appeal a claim that's denied as a preexisting condition.

Is it worth it to get an extended warranty on a car?

The answer depends on your risk tolerance. When buying a new car, you already have a standard warranty included in the price, so you can at least wait until that one is near its expiration to explore your options.

For used cars, the answer is trickier because it depends on the condition and maintenance history of the car you bought. For a certified pre-owned car that came with an extended warranty, go ahead and use the warranty if you can.

If trying to get a claim approved turns out to be a huge headache, it might not be worth the money to buy another extended warranty when that one expires.

Reasons to not buy an extended warranty

Some reasons you might opt not to get the extended warranty include:

• You had bad experiences trying to get repairs covered under the original warranty that came with your car.
• You've made modifications to your car that would either void a warranty or render it pretty much useless.
• You've done the routine maintenance on the car yourself, so you don't have official records documenting its maintenance history.
• You do a lot of off-roading, hauling or other things with your car that a warranty underwriter could deem "abnormal."
• You'd just prefer to handle repairs without the stress of a claims process.

Extended warranty vs emergency fund

Depending on whether the car is used or new, an extended warranty can range from about $1,000 to $3,000 for a coverage period lasting three to five years (or a certain mileage).

Would you be better off forking over that cash for a warranty or stashing it in a savings account to pay for repairs as needed over that time frame?

The good news is you aren't stuck with one decision or the other. As mentioned, you can hold off on deciding about that extended warranty until your existing warranty is about to expire.

While you're waiting, go ahead and keep the cash you'd spend on it in a savings account so it can earn interest while you weigh your options.

Mistakes to avoid when buying an extended car warranty

If you would feel more comfortable having that extended warranty, there are some important steps to take to make sure you're getting a fair price and paying for a warranty that is actually usable.

Here are some of the biggest mistakes car buyers make when buying extended warranties:

• Forgetting to negotiate the price. The price you're offered isn't set in stone. Start by offering to pay half (or even less) than the price you're initially quoted and negotiate from there.
• Not vetting the company. You'll get plenty of ads, phone calls and emails offering you an extended car warranty. But they aren't all created equal. You need to buy one from a reputable source, like your car's manufacturer, a local bank or an auto club like AAA.
• Getting pressured into buying an extended warranty right away. At the dealership, the salesman might put a lot of pressure on you to add that warranty right then. Just take your car home, do some research, and compare prices and options from multiple reputable companies. Your dealer's offer might be the best one, but you might end up scoring a better deal elsewhere.

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When you rent a car, the company almost always tries to add additional rental car fees, including offering supplemental coverage that costs extra. When you get to that stage of the booking process, you're probably wondering if it would be irresponsible of you to decline to save a few bucks.

The good news is that the answer is probably no. Most people can safely decline the added coverage. Technically, what rental car companies are offering you is usually not insurance, but a waiver. Basically, for a fee, you can waive responsibility for damage to the rental car while you have it.

The benefit of this is that, if something happens, you can just return the car and be done with it. There's no claims process and no deductible to worry about. The drawback is that these waivers can be pricey and, depending on what's in your wallet and where you're driving, probably unnecessary.

If you already have car insurance and especially if you have a credit card that covers rental car insurance, it probably isn't worth the added cost. Feeling unsure about whether you should deny that damage waiver the rental car company is offering you? Here's what you need to consider as you decide.

Your regular car insurance likely applies when driving a rental car

If you already have car insurance, your coverage likely extends to a rental car. That is, whatever you'd be covered for when driving your personal car should apply when driving a rental as well.

But, there are always exceptions and the limits may differ depending on where you're renting the car.

If you're booking a car rental soon, call your insurer and ask the following questions to find out what coverage you have and whether or not there are any gaps you might need to address before getting behind the wheel:

• Does my current coverage extend to a rental car?
• If you pay for roadside assistance or other special coverage, too, do they also extend to a rental car?

If the answer is yes to both of these questions, review your policy just to remind yourself what is included.

If your regular car insurance is a minimum coverage policy, for example, you wouldn't be covered for damages to the rental. In that case, paying for the collision damage waiver might be worth it.

If you're driving this rental car for an extended period, it might be worth getting a quote to add collision insurance to your existing policy. Those waivers can get expensive fast, so it might be cheaper to just add the coverage to your policy.

You probably aren't covered if you're driving in a foreign country

If you're renting a car in another country, your U.S. policy likely doesn't extend beyond the United States (and sometimes Canada or Mexico). In this case, you'll need to check the insurance requirements of the country you're driving in.

Since you'll also probably need to apply for an international driving permit in order to drive there, you can check into insurance requirements while you're doing that. This is also something you can ask the car rental company about.

Your credit card might also fill any gaps in coverage

Many travel credit cards offer rental car protection as a perk. This benefit kicks in after your own car insurance pays out whatever it has to pay in an accident. While credit cards vary, the protection is usually similar to the damage waiver the rental car company wants to charge you extra for.

In most cases, activating this coverage is as simple as booking the rental with the credit card that offers rental car protection. If you're in an accident, it may reimburse you for any deductible you had to pay on your own insurance and it may cover damage or theft to the car you're renting.

If you have a travel card already, read the fine print on how its rental car protection benefit works and what it covers. If you don't, consider applying for a card before you book the rental.

Rental car reimbursement coverage is different (and not usually included)

If you're wondering whether your car insurance will pay for the rental car you need because you were in a car accident, that's a different story. Unless you made sure to add something called "rental car reimbursement coverage," you're probably going to be stuck paying out of pocket for that rental.

Of course, you can still decline the damage waiver because your insurance will cover you while you're driving that rental and, if you use the right credit card, you may not even be on the hook for the deductible if you're unlucky enough to get in another accident while driving that rental car.

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Question: I just paid off my car. Can I downgrade my car insurance now?

Answer: Many lenders require you to maintain full coverage for the life of your car loan. Once you've paid it off, you're free to choose the coverage you want for your car – as long as you meet your state's minimum coverage requirements.

Still, with few exceptions, it's probably a good idea to keep full coverage even though it's no longer required.

Here's what you can do to save on car insurance after paying off your car and why downgrading from full coverage probably isn't worth it.

You can drop gap insurance now

Gap insurance is an important type of coverage to have while you're still making loan payments. If your car was totaled while you still owed on that loan, gap insurance would pay off the balance so you don't have to keep making payments on a car you no longer have.

However, once your car is paid off, there's no reason to pay for gap insurance. Call your insurer, and drop this coverage right after you make that final payment on your car loan. This will shave a few bucks off of your premiums.

You probably shouldn't drop comprehensive and collision insurance

The most dramatic savings you'd get are from downgrading your car insurance to just the minimum coverage required by your state. In general, this means dropping comprehensive and collision coverage.

Comprehensive coverage pays for damages or losses that happen when you're not driving. For example, if your car was stolen or a tree fell on it, this is the coverage you'd need if you wanted your insurance company to pay for that.

Collision coverage pays for damages to your car in three main types of accidents:

• Collisions with other vehicles in which you're found at fault. Your liability coverage pays for the other person's damages. Collision coverage would pay for damages to your car.
• Single-vehicle accidents, such as hitting a telephone pole or guardrail.
• Collisions that happen while your car is parked, such as a hit-and-run.

While both types of car insurance are optional, skipping this coverage means you'd be paying out of pocket to repair your car or buy a new one in all these situations.

Even if you have a healthy emergency fund, it often makes more financial sense to have insurance pay for these risks so that you can preserve that fund for other kinds of emergencies like a job loss, major home repairs or unexpected medical bills.

Your newly paid off car is likely worth too much to risk dropping full coverage

At a certain point, most cars will eventually depreciate enough that the current market value is only a few thousand dollars. At that point, you can safely drop to minimum coverage car insurance because full coverage wouldn't pay you much anyway. Your newly paid off car probably isn't old enough for that just yet.

Here's some math to understand why (and how much longer you might have to wait for downgrading insurance to make sense). According to Kelley Blue Book, new cars lose about 30% of their value in the first two years after driving off the lot. After that initial drop off, they depreciate at a slower rate of around 8% to 12% per year.

Meanwhile, the average car loan term is about 68 months, or about five and a half years. If you bought a new car, then it likely lost about 60% of its value from the date you bought it to the date you paid off your loan.

This year, the average amount paid for a new car hit $50,000. You might have paid a bit less than that five and a half years ago. Using that amount as a ballpark figure, your car's current market value is likely around $20,000.

If you bought a used car, that initial 30% dip already happened before you got it. But it still depreciated 8% to 12% per year in the five and a half years that you were paying off the loan. According to Kelley Blue Book, you might have paid around $25,000 for it, meaning it would be worth around $14,000 by the time you paid it off.

Based on current average car insurance rates, dropping to minimum coverage would save you about $1,800 per year. Even with that used car, it would take nearly eight years of premium savings to make up that $14,000 worth of coverage you're giving up.

That's nearly eight years of being vulnerable to the risk of car theft, weather-related damage, hit-and-runs and other problems that aren't included in minimum coverage policies. With a new car, it'd be nearly 14 years.

The choice comes down to your risk tolerance

Downgrading your car insurance ultimately depends on your personal risk tolerance. If you have the cash on hand to pay for a new car if this one is damaged beyond repair and you're comfortable with the possibility of that happening, pocket those premium savings by dropping to minimum coverage.

However, if suddenly needing to fork over thousands to buy a car would wipe out your emergency fund or otherwise be a financial strain, it's better to keep full coverage for now.

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There are many things to celebrate when you reach the milestone of retirement, and one underappreciated blessing is not having to commute anymore.

For those who drive to work, this means considerably less wear on your car from sitting in traffic day in and day out.

Does that mean you can cut your insurance bills? Yes, cutting your daily commute can be leveraged to trim your premium. The difference probably isn't as much as you're hoping for — and there are more meaningful changes you can make as you retire that will net better savings.

If you're in your 50s or 60s, the good news is you're already likely paying some of the lowest rates you'll ever pay. Drivers in this age range are considered some of the least risky to insure by providers. Once you hit 75, premiums start climbing, as older drivers are considered higher risk.

That means decreasing your annual mileage is unlikely to make that much of a difference to what you're paying. It also means you don't need to make any dramatic changes to your coverage just yet if you're not ready.

If you want to see a meaningful drop in rates, here are some changes you can make and how much you can expect to save from each one. Make the changes now or keep them in your back pocket for when your car insurance rates start surging in your 70s.

Save $80 for low annual mileage

Cutting your commute could be enough to put you in the "low mileage" club.

Insurers vary on what they consider low mileage and how much they discount premiums for those who drive less. On average, you can expect your policy to drop by about 3%. Based on the current national average car insurance rate of $2,671 per year for full coverage, that translates to about $80.

To get those savings, call your insurance provider and ask how much of a discount you'd qualify for and what you need to do to get the change in your driving habits reflected on your policy.

If your insurance is up for renewal soon anyway, use this opportunity to shop for a new policy, and make sure to report your new annual mileage now that you're no longer commuting.

To find out how much you'd save by switching car insurance now that your annual mileage is lower, use our car insurance comparison tool, powered by Bankrate:

Consider switching to a pay-per-mile policy

If cutting out your commute means you'll rarely be driving at all, you might be a good candidate for pay-per-mile car insurance. These policies usually charge a low base premium, then tack on additional premiums at a fixed rate per mile.

Since rates vary by provider and the amount you pay will change each month based on how much you drive, it's hard to estimate how much you'd save (or if you'd save at all) by switching to pay-per-mile car insurance. If you know you'll be relying on other modes of transport like walking, biking or using public transport for most of your daily needs, it's worth getting quotes.

One important caveat here is that the insurance company might require you to install a device in your car or download an app to track your mileage. If they do, read through the privacy policies thoroughly to see what other data the company might be gathering about you, how it will use it and with who else the data will be shared.

The savings might not be worth the risk of a data breach or the deluge of marketing calls and emails you end up dealing with by handing over this kind of personal information.

Save $2,100 by getting rid of a car

If you're in a two-car household, consider getting rid of one car. Now that you're no longer commuting every day, it might be easier for you and your spouse to get by on just one vehicle, and the savings can definitely make it worth your while.

Assuming you have a multi-car policy — which usually comes with a roughly 20% discount on insuring the second car — you could save an average of $2,100 per year by ditching one of your cars. That's based on the same $2,671 average calculated by Bankrate.

You should be able to log in to your account and see a breakdown of exactly how much each car on your policy costs to insure. If that info isn't available in the online portal, call your insurer to ask how much each car on your policy costs.

If you're getting rid of a car, you can save even more by getting rid of whichever car model costs the most to insure. If you're choosing between a Subaru and a Tesla, for example, ditching the Tesla will net you the most savings.

That doesn't mean you have to give up your dream car to save money, though. If you have a luxury or classic car you love, keep it (just remember to have the best insurance for luxury or exotic cars). Going from two cars to one on your insurance will still result in notable savings, even if the car you keep is the more expensive of the two.

Save $1,400 by downgrading one car to minimum coverage

If you're not ready to completely give up a car in retirement, you can still save thousands by opting to downgrade coverage on one of your vehicles to the minimum required by your state — if you're willing to accept the risks and possible higher costs in case of incidents.

A minimum coverage policy is about $1,800 cheaper than full coverage, according to Bankrate. If you're on a multicar policy, getting that 20% discount would translate to about $1,400 in savings by dropping to minimum coverage on just one of your cars.

If you go this route, make sure you're dropping coverage on your least valuable car. Minimum coverage typically means you're dropping collision and comprehensive coverage, so you're on the hook for repair bills if you're at fault in an accident. It's better to be on the hook for the car that will be the cheapest to repair.

Another option, if you're not ready to completely drop full coverage, is to lower the coverage amounts. If you're driving less, you're also less likely to be involved in a serious accident. You could drop the coverage amounts on your policy without exposing yourself to much more risk. (If, however, you're swapping commutes for long road trips, this would be risky.)

Be wary of decreasing your liability coverage, though. Liability coverage also shields your assets in the event the other driver sues you after an accident. As a retiree, that means your hard-earned retirement savings could be on the line if your policy doesn't provide enough coverage to pay for the lawsuit.

Save $800 by raising your deductible

Raising your deductible is another good way to find real savings on your car insurance. A full coverage policy with deductibles of $100 for comprehensive and $500 for collision insurance costs $3,041 on average.

If you raised those deductibles to $1,500 each, your premium would drop to an average of $2,205. That's about $800 saved without giving up coverage.

As your risk decreases, you can basically treat your car insurance as a "worst-case-scenario" tool. That is, max out your deductible knowing that you're only going to file a claim on your collision or comprehensive coverage if the damage is severe enough that you're pretty sure your car will get totaled.

Retirement is a great time to save on car insurance

While cutting out your commute might not impact your car insurance rates as much as you thought, there are lots of opportunities to slash your premiums now that you're retired.

Many of the strategies above can also bring other savings, too. Driving less means you'll save on gas, and if you get rid of a car, you'll save even more.

You can toss all those savings into a one-year CD and treat yourself to a vacation or shopping spree every year, paid for by your monthly savings from paying less for car insurance, gas and car maintenance.

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Picture this: You leave the ashen skies and teeth-chattering confines of winter for the sunny and warm pastures of your favorite winter destination. Relaxed, you return in the spring only to open your garage and find a horror awaiting you. While you were gone, your prized vehicle became an all-you-can-eat buffet for rodents.

This happened to Ken Huening, CEO of CoverSeal, on two occasions. "My BMW i8 was eaten twice. I tried dryer sheets, rodent traps, and other solutions, but none of them worked." On one of these occasions, it cost $18,000 to repair his vehicle.

And if you don't have the right insurance coverage, you could be on the hook for this bill. That's why, with Ken's help, we'll cover some tips to help you protect your vehicle from a rodent harvest. I'll also include insurance tips to ensure you have the financial protection you need.

Why do rodents use vehicles?

"Rodents use vehicles to hide from predators," remarks Huening. Once they find a safe hiding spot, they use it to eat, have babies and leave droppings. These droppings are scent breadcrumbs they'll use to return to the scene of the crime.

As rodents develop, so do their teeth. And they need to gnaw on something to keep their teeth from becoming too big, or else they won't be able to eat.

Since many rodents house themselves in battery or engine compartments, it's only natural that they find wires to chew on. They'll also chew on wires and other components to make way for their family members, which sounds cute on the surface, until you receive the repair bill.

"The average cost of a rodent repair bill is $2,500," Huening added. However, if you have a foreign or luxury vehicle, components are harder to replace, meaning you could easily add another zero to that repair bill.

Moreover, it can take months to complete the repair process. In some cases, that can extend to a year if parts are difficult to find.

Therefore, if you plan to travel this winter, knowing how to protect your vehicle is essential.

Rodent-proof your ride. Here's how.

Fortunately, with a few preventative measures, you can lower the risk of costly damage and keep your car safe while you’re away.

Best practices for storing your car inside

If you plan to park your vehicle indoors, Ken has a few tips to help. "The first of which is to pop your hood some. Rodents don't like being exposed for fear of being found by predators, so popping your hood can prevent them from using it as a nest."

The second tip is to seal your garage door. Doing so creates a barrier that doesn't allow rodents to enter in the first place. How do you seal it? You can use foam weather stripping to seal any cracks or holes.

It's also vital not to store any food in your garage, as that's like a neon welcome sign to usher them in.

Best practices for storing your car outside

Meanwhile, if you plan to store your vehicle outdoors, location is paramount. "You don't want to park your vehicle near a food tree because what happens is animals forage for food, then take it somewhere safe to eat. And if your vehicle is nearby, it creates the perfect nest for them," added Ken.

Other places to refrain from parking your vehicle include sewer drains or near downspouts, which are rodent superhighways. Similar to indoors, you can pop the hood to keep rodents out, but then the weather becomes another concern. Therefore, the smartest approach is to keep your vehicle away from areas where animals gather.

You can also use a car capsule. These are like a snowglobe for your car that'll protect it from any intrusions.

Lastly, you can also consider a car cover. Reputable car covers provide 360-degree protection with a weighted bottom to ensure it stays on your vehicle, whether you're gone one day or one year. They prevent pest intrusions to keep your car in showroom quality upon your return.

This is important too because rodent damage can impact another aspect of your finances.

Add another barrier of protection with the right car insurance policy

Rodent damage has become a billion-dollar problem for the insurance industry. Ken remarked, "Insurance companies are modifying their comprehensive policies away from covering vehicle damage from animals."

It means it's vital to check with your insurance carrier to ensure your comprehensive coverage includes animal damage. If it doesn't, then you'll want to shop around with other carriers.

You can do so quickly using the tool below, powered by Bankrate:

Another consideration is your deductible. Your deductible is the amount you must pay before your insurance carrier satisfies its portion of the claim. You want to strike a balance between maintaining affordable premiums and being able to pay out-of-pocket to settle your deductible.

Ultimately, rodent damage can happen to your vehicle whether you're traveling somewhere warm for the winter or just leaving it outside. Ken's Bentley incurred damage from rats within a day. Therefore, it's vital to consider the location where you park your vehicle and buy a proper cover or capsule to keep it protected.

What's more, make sure to examine your insurance policy, as some carriers are discontinuing coverage due to animal damage. Doing these things ahead of time can keep your vehicle safe and give you peace of mind when you travel over the winter.

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Question: My car was totaled in an accident. Should I repair and keep driving it or buy a new one?

Answer: In many cases, buying a car after your current car is declared a total loss is the easier, safer and more financially sound option. But there are definitely scenarios where keeping your totaled car makes sense. It's not easy to find information out there about when and why you might be better off keeping a car after it's been declared a total loss.

So, let's break down the pros and cons of each option and some of the math you can do to figure out what your best move is after getting in an accident and having a car insurance company declare your car a total loss.

What happens when a car is totaled?

After a car accident, the insurance company will assess the damage and calculate an estimated repair cost. At the same time, it will determine the fair market value of your car immediately before the crash — essentially, what it would have sold for based on its mileage and condition.

If the estimated repair costs exceed the fair market value or, in some cases, exceed 75% of the fair market value, the insurance company will declare your car a total loss. Instead of paying for the repairs, then, the insurer will pay that estimated fair market value.

If the car is fully paid off, you'll get a check for that fair market value minus your car insurance deductible and the insurance company will keep the car.

If you're still making payments on it, your loan provider will get that check and, if there's anything left after applying it to your loan balance, you'll get the leftover – and the insurance company keeps the car.

If you have gap insurance, that coverage will pay off the remaining balance of the loan, allowing you to get the full payout from the insurance company.

If you want to keep your car after it’s declared a total loss, you’ll need to notify the insurance company and, if applicable, your lender. Once the loan is paid off, you typically have the option to keep the vehicle.

However, the insurer will deduct the salvage value — the estimated amount the car could bring at a salvage yard — from your payout.

Can you keep your car after it's been totaled?

If you own the car or are able to pay off the loan with the insurance payout, you can probably keep the car after the insurance company declares it a total loss. But, just because you can doesn't mean you necessarily should. The first thing to consider is that your car will likely be given a salvage title.

A salvage title is a way of disclosing to any future buyers that this car has been in a severe enough accident to have been declared a total loss. The laws around when they are issued and what restrictions they come with vary by state, but generally, you will need to have the car inspected and deemed roadworthy before you can drive it again.

In some states, getting it repaired and deemed roadworthy again will result in your salvage title becoming a "rebuilt title" or a "rebuilt salvage title." This means that it had been declared a total loss, but has since been repaired and is now legal to drive.

For car insurance purposes, getting coverage with a salvage or rebuilt title is tricky. Many insurers will only offer the minimum amount of coverage required by your state. Others may refuse to insure it altogether.

In some cases, you might be able to get full coverage on a rebuilt title. But note that the "fair market value" is pretty low once it's been declared a total loss, so it might make more sense to drop to minimum coverage car insurance anyway.

That lower fair market value will also matter when it comes time to resell. Many dealerships won't accept a car with a salvage or rebuilt title for trade-in so you'll likely have to do a private sale.

When you do, don't expect much. It's risky to buy a car that's been declared a total loss because the next buyer doesn't know how thoroughly it was repaired, and they'll also face the same issues with getting car insurance you face now.

Despite the serious drawbacks to driving a totaled car, there are some benefits:

• In some cases, the cost of repairs can be substantially less than the cost of a new or reliable used car, especially as the recent auto tariffs drive up car prices.
• While you may only be able to get minimum car insurance coverage on your car after it was declared a total loss, that minimal coverage can cost less, resulting in thousands of dollars saved per year depending on a variety of factors. Between the savings on insurance premiums and the savings on putting off buying a new car, you'd be able to put away a good nest egg over the next few years to put toward your next car when you are ready to upgrade.
• If the alternative is buying a used car, you might have greater peace of mind putting that insurance payout toward repairs instead. Since you already own this car, you know its history and you can make sure that the repairs done to it now are done properly and thoroughly.

These are all important factors to consider when deciding whether or not it's worth keeping your totaled car.

When does keeping a totaled car make sense?

For all the issues discussed above, buying a new (or reliable used) car is often less complicated and less risky than repairing your totaled car to keep driving it. Still, there are a few exceptions that might make it worth keeping this car (though not necessarily to keep driving it):

• You have an older car with a low fair market value. If the fair market value is so low that even minor cosmetic damage (like a fender bender) could be enough to declare it a total loss, it might still be roadworthy. In that scenario, taking the payout and then repairing it will almost definitely be cheaper than buying something new or even used.
• It's a vintage or rare model that you can restore (or sell for parts). If you're a car enthusiast, having that classic car totaled is a painful loss. But taking the cash and keeping the car is probably the best option here. Depending on the severity of the damage, you can either restore this car or use the undamaged parts to restore a similar model.
• You want to donate it to charity as a tax write-off. Of course, you won't get as much of a tax deduction as you would donating a car that wasn't totaled, but this can add to the cash payout you got from your insurer.

How to decide whether to keep your totaled car or buy a new one

Assuming you're deciding between buying a car or repairing this totaled car to drive it, here are some tips to help you decide:

Compare the cost of repairs with the cost of buying.

Do a little online shopping for new or used cars that you would actually want to buy. If you know your car is going to be declared a total loss, you know roughly what the repair costs are.

They're at or near the fair market value of your car. If you haven't heard back from insurance yet, you can use Kelley Blue Book or Carfax to estimate your fair market value.

If the cost of the car you'd be willing to buy is substantially higher than repairing the one you have, you might opt to do the repairs.

According to Kelley Blue Book, the average cost of a new car is $48,841, while a used car averages $25,527.

Depending on how badly damaged your car was, it's possible that the cost of even fairly substantial repairs will still work out to less than the cost of buying a reliable car. That's especially true for more expensive makes and models.

Use the tool below to compare some of today's best auto insurance offers, powered by Bankrate:

Factor in your time horizon

Along with the dollar for dollar comparison of buying versus repairing, consider your time horizon. How much longer were you planning to drive that car before it was totaled?

If you were going to trade it in within the next year or two anyway, you might be better off putting the insurance payout toward a new car now. The resale value of your car after a total loss is going to be a lot lower than its fair market value before the accident. So, repairing it now and selling it in a year or two will result in a net loss.

However, if you were still planning to get many more years out of this car, repairing it might make sense if the repair costs are lower than what you'd spend on replacing it.

The bottom line: Should you keep it or move on?

For a lot of drivers, buying a car after a total loss is the easier and more financially sound option.

But if your car is older, rare or holds sentimental value for you, keeping it may be a good option. Just make sure you do the math and understand your state's requirements for driving a car with a salvage title.

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Driving for a rideshare company sounds great on the surface. You set your hours, meet people from all walks of life and earn money in the process.

If you're a college student or a retiree wanting to get out of the house more, you might consider it as a viable option. While it can be for many, there are some things you should consider before taking the plunge.

For starters, you'll need to use your vehicle for rides and deliveries. Over time, the wear and tear from the miles can reduce your earnings further with oil changes, ample trips to the gas station, tire and brake replacements and other repairs eating into your bottom line.

However, there's an even more critical element that relates to your car insurance.

The startling truth about insurance and ridesharing

Being a rideshare driver means you're driving more miles, putting you at risk for more accidents.

A University of Illinois at Chicago study found that one in three rideshare drivers had been involved in an accident. Depending on when the accident happens, it can make a huge difference in your financial protection.

Say you're starting work for the day and driving around awaiting your first rider. As you move around the neighborhood, a car pulls out suddenly in front of you, and even with quick reflexes, you're unable to stop in time, slamming into the vehicle.

The other driver has injuries and significant damage. Your vehicle has seen better days. Then you're surprised to find you're on the hook for damages to your car because your regular policy doesn't cover ridesharing.

Why? Because your regular policy is for personal use only, not commercial, which is what you would be using it for if you drove for Uber or Lyft.

While both provide limited liability coverage during this time, it's for other drivers. If your vehicle becomes damaged or you incur any injuries resulting from an accident, you could be on the hook for these costs if you haven't notified your insurance that you intend to use your covered vehicle for ridesharing purposes.

That means you could be without a car if you can't afford repairs, and if you're hurt, you could incur significant medical debt.

Thankfully, you can add rideshare coverage to your existing auto insurance policy. The best way to save money on insurance is to shop around. Use the tool below to explore some of today's best car insurance offer, powered by Bankrate:

How much does ridesharing insurance cost?

Insurify has a tool that lets you compare rideshare insurance costs in your area. They pool quotes from top providers, such as Allstate and Progressive, to help you see how much you'll pay. Keep in mind your costs vary based on where you live, what you drive and your driving history.

It’s important to note that this extra coverage is only needed during the period when you’re logged into a rideshare app but haven’t yet accepted a trip.

Once you accept a ride request, companies such as Uber and Lyft provide more comprehensive coverage that extends to you, your vehicle and other motorists if an accident occurs.

What does ridesharing insurance cover?

Adding rideshare insurance is integral to protecting your finances. Here are some of the coverages it includes:

• Liability coverage: Covers damage and injuries that another party incurs resulting from an accident.
• Comprehensive and collision coverage: Covers you financially if your vehicle incurs damage from an accident, weather or theft.
• Uninsured/underinsured motorist protection: If a driver hits you and doesn't have insurance or their coverage is inadequate, this bridges the gap to ensure you receive the financial assistance you need.
• Deductible reimbursement: It's an optional policy that covers the difference between the ridesharing's deductible (often around $2,500) and your policy's deductible to lower your out-of-pocket costs. What is a deductible in car insurance? It's the amount you must pay before your carrier pays its share of the claim.
• Additional coverage: You can also add on coverage for roadside assistance, rental car reimbursement and more.

A driver's checklist before doing ridesharing

Before signing up, read the qualifications of the provider to ensure you qualify. This is particularly the case for college students, as Uber requires a year of driving experience before being approved.

Once you qualify, reach out to your insurance carrier. Many of the top carriers allow you to change coverage in their app, or you can call to request ridesharing coverage. Ask them what their policy covers and any additional coverages you might want to consider.

Ultimately, while it's an extra step, securing coverage for ridesharing is integral. It bridges the gap between the lapses in coverage for when you're awaiting work and when you're working.

This will protect you financially from having to pay significantly out-of-pocket to repair or replace your vehicle and any other bills that arise.

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Question: My car is 10 years old. Should I drop down to minimum coverage on my car insurance?

Answer: The 10-year mark is a good time to reevaluate your car insurance needs, but there's more to making coverage decisions than your car's age alone. The national average cost of full coverage car insurance is $2,697 while minimum coverage averages just $820, according to Bankrate,.

Dropping your coverage has the potential to lower your insurance premiums by around $1,800. Whether that $1,800 per year in savings is worth the increased risk you face by not having comprehensive or collision coverage will depend on a lot of factors. Here's what you need to think about before you decide.

Find out how much you, personally, would save by switching to minimum coverage

At a certain point, the premiums you're paying for full coverage aren't worth the payout you'd get if your car were totaled. The first step to figuring out if you've reached that point is figuring out the dollar amount you'd save on premiums each year.

As mentioned earlier, you could be looking at around $1,800 per year in savings based on national averages. But it's a good idea to check with your insurer to get a more precise estimate.

Each state has its own minimum coverage requirements, and the insurance rates you pay depend on so many different factors that your premiums could be significantly higher or lower than the national average mentioned above.

In some cases, you can use your insurer's online portal to get instant estimates on your premiums based on different coverage scenarios. If your insurance provider doesn't offer that, call them up and ask how much your premium would be if you reduced coverage to the minimum requirements in your state.

Once you have that number, you know how much you would actually save by switching car insurance. The next step is to figure out how much financial risk you're exposing yourself to by dropping coverage. That part isn't quite as straightforward.

Use the tool below, powered by Bankrate, to explore and compare some of today's top auto insurance offers:

How much can you expect your car insurance to pay?

To decide if full coverage is worth its weight in premiums, you need to estimate the maximum payout you would receive if your car were damaged by something covered in the comprehensive or collision coverage you're thinking about dropping. To do that, answer the following questions:

What is the current fair market value of your car?

This is roughly the amount your insurer would pay if your car is totaled. In other words, it's the most you could ever expect to get paid after an accident. You can use tools from sites like Carfax or Kelley Blue Book (KBB) to get an estimate.

How much do common repairs cost for your car?

In the 10 years you've owned your car, you've probably had to make some repairs to it. Dig through your records and note the amount you paid for different repairs. Note that inflation is raising the cost of car repairs as well, so plan for those same repairs to cost a little more in the future.

You should also look up estimates for other common types of damage you'd need to get repaired after a car accident. That includes body work like repainting, patching up dents or scratches, or replacing broken fenders and headlights. It also includes internal repairs like fixing leaks and damaged engine components.

How many years of saved premiums would it take to reach that maximum payout?

If you don't want to do the research on the cost of repairs, another way of thinking about the value of full coverage is how long it would take you to save up the maximum payout yourself.

Let's say your current fair market value is about $10,000. At an average of $1,800 per year in saved premiums, it would take you over five years to save up that $10,000 yourself. If the estimated value is only about $5,000, however, you'd have that cash saved in under three years.

Based on those estimates, how quickly would the cost of repairs outweigh the fair market value of your car? Remember, your insurer will total your car if the cost of repairs after an accident is more than the fair market value of your car.

If fixing a headlight or replacing a radiator would be enough to put your repair costs over that value, your "full coverage" car insurance isn't really providing much coverage. But if the fair market value is still high enough that the repair cost from minor accidents wouldn't risk your car being totaled, full coverage still provides some value.

How much longer do you plan to keep this car?

The next factor to consider is how many more years you plan to drive this car and what your plan is when it comes to buying the next one.

If you're planning to drive this 10-year old car into the ground, you may well have another 10 years of driving left on it – but you probably aren't expecting a huge payout or trade-in value when it comes time to get a new (or new-to-you) ride.

In that scenario, dropping to minimum coverage now and stashing that $1,800 or so per year of saved premiums into a high-yield savings account or CD account would give you a nice nest egg to put toward your next car when you finally do retire old reliable.

If your car is damaged in an at-fault accident before you're ready to trade it in, you can use those savings to cover the repairs out of pocket and still have time left to rebuild your savings for your next car.

If you're planning to upgrade in the next couple of years, you might be hoping for a decent sale price or trade-in value to put toward your next car. In that case, keeping full coverage probably makes more sense.

The $1,800 or so per year you'd save won't build up fast enough in a year or two to make up for the risk of your car being totaled and leaving you with no cash on hand to put a down payment on something new.

Use the tool below, powered by Bankrate, to connect with a financial professional who can help you build a financial plan to reach your financial goals:

Situations when you should never drop to minimum car insurance

While there are some scenarios where the saved premiums are worth more than the value you're getting out of full coverage car insurance, there are a few situations where it's never worth the risk:

• You're leasing the car. Leasing agents typically require full coverage as part of the terms of the lease.
• You're still paying off the car loan. Full coverage is sometimes required by lenders. Even if it isn't, if you're still paying off this car, your financial risk in an at-fault accident is high. If your car is damaged beyond repair, you could be left paying off a loan for a car that is now sitting in a junkyard while also taking out a new loan for a new car.
• You have a luxury or exotic car. If you're driving your dream car, you really don't want to risk being underinsured. The specialty repairs are more costly, and replacing that car in an accident isn't always as straightforward as heading to your local dealership. Even the higher rates of specialty coverage needed for this car are still likely low enough to be worth the peace of mind that you'll be paid the full cash value of your specialty vehicle if anything were to happen.

Is minimum coverage right for you?

The right time to reduce your coverage to the minimum car insurance required by your state might be today, or it might be never. The answer depends on how much you're paying, how much your insurance would pay you in a covered accident, and how much risk you're willing to expose yourself to for the remaining years you plan to drive this car.

With that said, if you drive a car long enough – and it isn't a rare or specialty model – you will probably reach a point where the maximum payout you can expect from a full coverage policy isn't worth the thousands per year in extra premiums you're paying for that coverage.

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It’s always a good time to get a good deal. But as tariffs take effect on some imported goods — and as the Trump administration continues to negotiate tariffs with other countries — you may be especially interested right now in how you can save money while you shop.

Kiplinger Personal Finance Magazine has taken the time to assess how you can find deals this year on investments, groceries, electronics, clothing, cars and travel, as well as how to take advantage of credit card perks — with a special emphasis on finding deals for products and services most prone to rising prices as the trade war evolves. In this article, we look at deals on cars. (See below to find links to our other articles about deals.)

The 25% tariffs on imported cars and car parts that went into effect in the spring have significantly affected the U.S. auto industry, prompting automakers to adjust pricing and production strategies.

“The bottom line for consumers is they’re going to have to do a lot of extra research,” says Brian Moody, senior editor for Kelley Blue Book (KBB), an automotive vehicle valuation and research company.

Not all vehicles will be affected equally, and even cars built in the U.S. may cost more, so you’ll want to research prices thoroughly to avoid surprises, he says.

If you’re shopping for a car, consider these strategies to reduce your costs, both up front and over the long term.

Leverage your memberships

Members of wholesale retailers Costco and Sam’s Club can take advantage of their car-buying programs.

The Costco Auto Program helps members find deals on new and used cars, collaborating with dealerships to prearrange special pricing for members.

Members recently also had access to special promotions and incentives, such as up to $2,000 off on select new Audi models or discounts on electric vehicles from brands such as Chevrolet and Volvo.

Additionally, Costco provides discounts of 15% (up to $500 per visit) on parts, service and accessories. Costco’s annual membership fees start at $65 per year.

Sam’s Club also offers prenegotiated pricing on new and used cars. The average savings for new cars is about $3,400 off the manufacturer’s suggested retail price, according to TrueCar, an online automotive marketplace.

Members can also get discounts on tires and tire installation. Sam’s Club memberships start at $50 per year.

Factor in insurance and other long-term costs

Some vehicles are more expensive to insure than others. More-affordable vehicles, such as the Toyota Corolla, Toyota Camry and Honda Accord, will usually have the lowest insurance premiums, Moody says.

Buying a car that’s relatively inexpensive to insure can keep your long-term ownership costs down.

Comparison-shop insurance policies, too. Most major insurers offer free quote calculators on their websites. Or use a site such as TheZebra.com to compare quotes from multiple insurers.

Think about other long-term costs as well. Buying a fuel-efficient vehicle can significantly lower the costs of car ownership over time.

At www.fueleconomy.gov, click on “Compare Side-by-Side” to use a tool that allows you to select various vehicle models and compare their fuel economy.

For each model, you’ll also see estimated annual fuel costs and how much you’ll save (or how much more you’ll spend) on those costs over five years compared with the average new vehicle.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Having your car stolen is an unfortunate reality for many auto owners. Car theft has been steadily rising, with a 28% increase in incidents from 2019 to 2023, per the National Insurance Crime Bureau (NICB).

The good news is that the trend is reversing. The NICB reported fewer than 1 million auto thefts in 2024, representing the biggest decrease in vehicle thefts in 40 years.

While car thefts are down, there are still factors that could influence your risk. We'll cover these factors, as well as how elevated theft risks could result in higher car insurance rates and ways to lower costs.

States with the highest, lowest increase in auto thefts

Where you live matters when it relates to auto theft.

Here's a look at the five states with the largest increase in theft rates, with all data for these tables provided by the NICB:

Alternatively, here are the five areas that had the highest decrease in auto thefts last year:

What's surprising is that there are some states that overlap both categories. Colorado and Nevada are among the states most susceptible to car theft rings. Yet, both are witnessing substantial decreases in auto thefts.

In Colorado's case, all vehicle thefts are felonies, regardless of vehicle value, under a law that went into effect in 2023. The law also levies stiffer punishments for repeat offenders.

Meanwhile, Nevada witnessed success through enhanced law enforcement measures, such as educating the public on doing software updates on their cars and issuing free wheel locks to drivers.

The 10 most stolen vehicles

Along with where you live, the type of vehicle you drive can also attract more thieves.

Here's a look at the 10 most stolen vehicles last year:

Older models of the Hyundai Elantra didn't feature engine immobilizers, anti-theft measures used to thwart car thieves from bypassing the car's ignition switch.

Meanwhile, the Chevy Silverado was one of two pickups to make the list, as later models are easy to hot-wire, and parts remain extremely valuable.

Having one of these vehicles can elevate your risk of having your vehicle stolen, and that could reflect on what you pay for your auto insurance.

Two factors underwriters examine are your location and the type of vehicle you drive. If you live in a high-risk area or drive a car susceptible to theft, it could spike your rates.

It's imperative to shop around a few weeks before your policy renews to ensure you're receiving the best deal.

Another way to lower car insurance costs is by installing anti-theft equipment in your vehicle.

Behaviors to prevent auto theft

Despite a decrease in auto thefts, there are several behaviors to employ to reduce your risk of having your car stolen.

The most important thing is to refrain from leaving anything valuable in your car, such as money, keys, high-priced items such as electronics or anything else that could trigger a thief to think it's a crime of opportunity.

Another way to deter thieves is by installing anti-theft measures, such as a steering wheel lock. As its name implies, it prevents your vehicle from turning, making it a less desirable option for thieves looking for a quick score.

More sophisticated thieves use relay devices to access your car. They target cars with keyless entry systems, allowing you to start your car or lock/unlock it without a physical key.

They'll use a signal repeater to detect the key fob's signal. Once intercepted, the signal travels to a device held by the thief, which they can use to unlock and start your car.

One smart way to prevent thieves from achieving this is with a Faraday Box. These prevent thieves from accessing the signal from your key fob, and they're more durable than pouches, which wear down over time.

Overall, there's good news in that auto thefts are slowing down substantially. Advancements in anti-theft measures have made it more difficult for thieves to access vehicles.

By employing these best practices, you can lower your car's chances of being targeted by thieves — and you might earn an insurance discount in the process.

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Congratulations, you've worked hard and are ready for a vacation. Some time away. Some R&R. Some phone-free time (though we know that never actually happens). Are any of your insurance policies — auto, homeowners, renters or health insurance — going along for the journey?

Here are three things to keep in mind about your insurance when you're traveling this summer in the U.S. (If you're leaving the country, check with your insurance agent or broker to find out if the level of coverage you have is sufficient or if you'd be better off with a supplemental insurance policy.)

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

No. 1: Rental cars

If you're fortunate enough to be flying somewhere and renting a car, then you're sure to be hit up with a plethora of options at the rental car counter, the good old upsells.

The rental car you managed to find was $40 a day, but you're going to get everything from liability insurance to physical damage insurance, even mechanical breakdown and towing coverage. Heck, you can even prepay for gas so you can return the car on empty.

So to buy or not to buy — that is the question. Some options are a matter of personal choice. If you want to prepay for gas, why not? It's convenient.

When it comes to liability and physical damage to the car, it will depend on the personal auto insurance policy that you already have.

Most policies will extend the same coverage you already have to a temporary replacement vehicle. Liability insurance is typically even more portable, so chances are you can skip paying extra for that if you already have it on your existing insurance policy.

Now, these days, there may be some extremely basic policies out there that specifically exclude rentals, so before making any final decisions, either check your policy language, or save some time and ask your insurance agent or broker if your coverage will extend to a rental car.

No. 2: Your luggage, your stuff

So many things can happen to your luggage — you forgot it in your Uber, the airline lost it or sent it to Budapest or, heck, maybe a hotel employee moonlights as a thief.

If you have a property insurance policy — let's narrow it down to a homeowners insurance policy, condominium owners policy or renters policy for the sake of discussion — then chances are excellent you will have some coverage accompanying you on your journey, with a few caveats.

First, your entire amount of personal property coverage will not go with you. See, the insurer will figure you're not taking everything you own on your trip, so 100% of your coverage won't go either. Typically, 10% of your personal property amount will be covered while you are away.

So, if you have $100,000 in personal property coverage, then while you're on the beach in Hawaii, you will have about $10,000 in coverage. Check your policy or with your agent or broker — there are nuances in this area, too.

No. 3: Medical issues

We're only human, and let's face it, stuff happens. You can get the flu just as likely while away as you can at home. Arguably, you are more exposed to bacteria and viruses while traveling than you are when working from home.

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So, yeah, it's the pits, but you may get sick and need a doctor. Or, and I hate to even put this out in the universe, you could get injured.

While the view from the top of that cliff looked magnificent, the jump into what appeared to be deep water may not have been. Even needing a simple prescription medication brings your health insurance into play.

While there is a great deal of nuance here, depending on your health insurer and the type of plan you have, most of them will have provisions for emergencies.

It wouldn't be a bad idea to have a peek at that policy as well so that you know whether to pay out of pocket or go through the process of providing your insurance information to the pharmacy, only to be told it is not in your network.

Work hard, play hard. Vacations are meant to be enjoyed, not dreaded, but — and I'm not trying to be a Debbie Downer — the truth is, I can personally attest to things happening when you're away from home.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Driving can be a riveting adventure: Crank the volume and enjoy the freedom and serenity of the open road. But that joy can be short-lived, especially if you share the road with dangerous drivers.

Dangerous drivers can take many forms. There are those speeding as if they’re chasing a podium finish, drivers texting out Hemingway missives while going 70 mph, or my personal favorite, the person who decides to cross three lanes of traffic to make an exit ramp with seconds to spare. (I don't miss driving in Orlando, Florida, not one bit.)

Speaking of less-than-desirable locales to drive in, you're more likely to encounter collisions in certain areas of the country, as Allstate's newly released 2025 America's Best Drivers Report reveals. To conduct this study, they examined auto insurance claims in the 200 most populous areas of the United States.

If you live in an area prone to dangerous drivers, not only can it impact your ability to drive, but it could also impact your wallet with higher car insurance costs. Luckily, there are ways to lower your car insurance rates, even with elevated risk factors.

With this in mind, here's a closer look at which 10 cities made Allstate's list.

The most dangerous cities for drivers

These are the most dangerous metros for drivers:

• Boston, Massachusetts
• Washington, D.C.
• Baltimore, Maryland
• Worcester, Massachusetts
• Springfield, Massachusetts
• Glendale, California
• Los Angeles, California
• Oakland, California
• Providence, Rhode Island
• Philadelphia, Pennsylvania

You might have noticed a theme with these: They're either on the East or West Coast, where there are higher concentrations of drivers.

Boston has a reputation for its less-than-stellar road designs, while Los Angeles is not ideal for quick commutes.

If you live in or near one of these areas, elevated risks of collision could result in higher car insurance costs. How do you save?

Reducing car insurance costs amid dangerous drivers

The most effective way I've found of reducing insurance costs is to shop around for options a few weeks before the policy renews.

Doing so helps you gain a ballpark estimate of what you should pay for insurance. That way, if your renewal premium increases significantly, you have other options.

Use the tool below, powered by Bankrate, to explore and compare some of today's top car insurance offers:

Another tip is to notify your carrier of any changes in your driving behavior. If you recently retired and don't drive as much, you might qualify for a low-mileage discount. I took advantage of this when I started working remotely years ago, and the discount is substantial.

There are other things you can do to lower insurance costs, such as:

• Increasing deductibles
• Removing comprehensive and collision coverage from older vehicles you own outright
• Bundling multiple policies with one provider
• Taking advantage of all available discounts
• Completing a defensive driver class
• Using telematics to monitor driving behaviors

What are telematics? Many insurance companies offer discounts if you download their app or use their device to monitor your driving behavior.

Notably, they're looking to see if you obey speed limits, don't make many erratic stops or acceleration bursts, and how often you drive at night.

Providers will monitor your driving habits for one to three months to determine a score based on riskier driving behaviors. The lower your risk, the more likely you are to earn a good discount since you exhibit safer driving behaviors.

A simple tip if you live among dangerous drivers

Along with choosing the right insurance plan, another tip is to install a dash cam on your car, especially if you live in a higher-risk area.

On its own, a dash cam won't reduce your car insurance costs. However, it makes it easier for your insurance company to process claims if collision or property damage occurs.

In the case of a he-said-she-said, in which police try to determine cause, having a camera can help you immensely if you didn't cause the accident and don't want to be at fault or liable for damages.

Bottom line on protecting your car from dangerous drivers

Ultimately, whether you live in a city with a higher concentration of dangerous drivers or not, it pays to shop around for car insurance regularly.

Along with this, consider installing a dash cam on your car in case an accident occurs and you need video evidence to show your insurance carrier. It can expedite claims, and in cases in which you didn't cause the accident, it could save you significantly.

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In 2024, more than 850,000 vehicles were stolen, according to the National Insurance Crime Bureau (NICB).

This year, my car will be among 2025’s tally, as it was stolen recently.

There seems to have been a crime wave in my city, with at least four friends experiencing auto theft in the span of a few weeks. I was hesitant to share personal details online, but I decided that if my article can help even one person prevent a costly, stressful theft, then it’s worth it.

Here’s what I learned from having my car stolen, and how you can try to keep it from happening to you.

Simple steps to reduce your risk of auto theft

When it comes to preventing car theft, some steps are obvious — such as not leaving your keys in the car or letting it run unattended on the street.

But others aren’t as well known. One of the simplest and most effective things you can do is buy a Faraday pouch or case for your key fob. This small $5 investment can block thieves from hacking your key signal.

In recent years, Kia and Hyundai models have been frequent targets of key fob hacking, and in 2023, they topped the list of most-stolen vehicles, according to the National Insurance Crime Bureau (NICB). Both automakers have taken steps to address the issue.

If you often forget to lock your car, a digital car key or a remote-locking app on your phone could be a helpful solution. Some apps and devices can even automatically lock your car when you walk away or move out of range, adding an extra layer of security.

Anti-theft devices that help deter car thieves

Additionally, cars come with, or can be equipped with, a wide variety of anti-theft features. If your car doesn’t have any of these features, do some research to determine which ones you could add.

Some onboard anti-theft features include alarms and GPS trackers. An easy one to add yourself is a steering wheel lock. Some vehicles have immobilizers that prevent them from being hotwired, hood locks, battery disconnect switches and pedal locks.

If your car doesn’t have an onboard GPS tracker, hide an AirTag, Tile or other tracker inside the car to increase the chance of recovery. They cost about $20 and can make all the difference. This is often one of the first things police will ask about because it’s the best and easiest way to locate the vehicle.

Don’t forget to let your insurance company know that your car is equipped with anti-theft features because you might also qualify for a discount.

What your insurance covers if your car is stolen

Speaking of insurance, most auto policies offer little to no coverage for personal items stolen from your vehicle.

For example, if your car is stolen with your wedding ring inside, the ring likely won’t be covered unless it's protected under your home insurance or you've added extra coverage to your auto policy. That’s why it’s important to review your home insurance as well, since many policies cover personal belongings stolen from a car.

If you have a newer car, it might be worth considering general asset protection (GAP) insurance. Standard auto insurance only covers the car’s current market value — not what you still owe on your loan.

For example, if your insurer values your stolen car at $20,000 but you still owe $30,000, you’d be responsible for the $10,000 difference unless you have GAP coverage. Keep in mind that insurance adjusters often undervalue stolen vehicles, which makes GAP coverage even more important.

According to Car and Driver, GAP coverage averages $20 to $40 a year when added to an existing auto policy, depending on the insurer. You can also purchase it for a flat fee from a lender or dealership, usually for a few hundred dollars, but keep in mind, you’ll likely pay interest on that amount if it’s rolled into your loan.

It’s also a smart move to add rental reimbursement coverage to your auto policy. Many insurers offer this optional add-on to help cover transportation costs while you shop for a replacement vehicle. Just be aware there’s usually a daily cap.

For example, my insurer covered $40 per day — only half of what it actually cost to rent a car — but that coverage still saved me more than $1,000.

Explore some of today's best car insurance offers with the tool below, powered by Bankrate:

What to do immediately after your car is stolen

The number one thing to remember if your car is stolen is to report it immediately. Don’t wait. Here’s a list of all the entities you should notify:

• Police
• State DMV or equivalent agency (e.g., Secretary of State)
• Your lender or leasing company
• EZ-Pass or the operator of any other electronic toll collection device you might have
• Your insurance company — If you delay, your insurance claim could be denied

If your wallet was in the vehicle, don’t forget to contact your credit card companies, banks, etc. Let the DMV know your license was stolen, as well.

Final thoughts on theft recovery and prevention

If your car is stolen, it’s important to be patient and prepare to be frustrated. In many cases, police won’t do much beyond flagging the vehicle and plates as stolen.

However, in 2023, more than 85% of stolen vehicles were recovered, according to the NICB. As further incentive to report your vehicle stolen immediately, cars reported stolen in the first 24 hours had a 34% same-day recovery rate that year.

To improve the chances of recovering your stolen vehicle, fully cooperate with the police and provide as much detailed information as possible. Stay proactive by checking in regularly — law enforcement may not always notify you if your car is found, especially if it’s recovered in another county or state.

If you’re not getting support from your local police department, consider reaching out to county or state law enforcement. You can also contact local elected officials for help. A friend of mine, whose car was stolen and GPS-tracked shortly after mine, was able to get assistance from state authorities when city police wouldn’t act on the vehicle’s location.

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There’s finally some good news for consumers this month. After a period of soaring car rate hikes, car insurance has started to shift to a buyer’s market, according to the J.D. Power 2025 U.S. Auto Insurance Study. That’s because rising rates and declining customer satisfaction have triggered a shift in the market, causing even the “stickier” customers who were traditionally least likely to jump ship, to consider switching car insurance.

Now, car insurance rates look to be stabilizing, climbing just 2% by the end of last year, compared to an average 13% hike at the beginning of 2024. And the increased willingness of customers to switch providers has forced insurers to shift their focus toward retention strategies, which means customers could see meaningful improvements in service, claims processing and other key features that motivate customers to renew with their current provider.

That’s great news for drivers, who may now enjoy a break from skyrocketing car insurance rates and a boost in service quality. It also demonstrates the power of shopping around. The more customers who seek additional quotes before renewing, the more pressure insurers face to compete on both rates and service.

Companies focus on retention as more and more customers switch car insurance

This year’s J.D. Power U.S. Auto Insurance Study gathered responses from over 48,000 auto insurance customers between May 2024 and April 2025. The biggest takeaway: Even though overall customer satisfaction held steady, dropping just two points compared to J.D. Power’s 2024 study, the number of customers who have switched or are considering switching has surged to record highs.

Even more alarming for car insurers, the study found that nearly half of high value lifetime customers – those who typically stick with the same insurer for longer, have a multi-policy bundle and pay higher premiums – are unlikely to renew with their current insurer.

While those high-value customers were the least likely to renew, retention rates didn’t look much better across medium-value and low-value customers, either, which were only one or two percentage points more likely to stick with their current provider compared to the high-value segment.

These findings come just weeks after another J.D. Power report found that 57% of customers had actively shopped for new car insurance in the last year – the highest percentage ever recorded in the 19 years that J.D. Power has been tracking this data. That record high number of customers reshopping car insurance came even as rate hikes began to slow.

Shopping around for car insurance pays off

In a similar survey by LendingTree published in March, 92% of the customers who reported switching car insurance saved by doing so. Of those who switched, 63% saved $100 or more per year by doing so. That may not sound like much, but it adds up over the years. And with online tools making it easier than ever to compare multiple quotes and switch, the chance to save $100 or more is well worth the hour or so of your time it takes to switch.

It might be worth sticking around if you’ve had a positive claims experience with them in the past and your rates haven’t climbed too much. But if you aren’t happy with the service or the claims process, now is a great time to get a couple of other quotes. You could end up not only cutting your car insurance bill, but also getting better service at the same time.

That’s especially true for baby boomers or anyone earning a six-figure income, as those two demographics were the most likely to see higher rates at renewal, according to the LendingTree survey.

Related content

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• Is Your Smartphone Making Your Car Insurance More Expensive?

Kiplinger readers are a savvy bunch, especially when it comes to making smart choices with their money. So for the third year running, we asked you to rate financial providers based on your experiences with them. More than 2,700 readers completed our survey earlier this year, judging the products and services they use in 13 categories, from brokers and wealth managers to annuity providers, tax software, and home and auto insurance companies.

In the survey, respondents scored providers on certain criteria, such as their experience with the company’s customer service team, the likelihood they would recommend the product or service to others, and their overall satisfaction with it. Readers also had the option to leave comments about their experience, and we have shared some of them in the full category guides (remarks may be lightly edited for length and clarity).

For each category, we’ve listed an overall winner that earned the highest total score. We’ve also listed other products and services that earned above-average scores for the various criteria we asked readers to assess. Many thanks to all of you who participated in the survey.

Kiplinger Readers’ Choice Awards Categories

Best Full-Service Brokers

We asked readers to evaluate brokerage firms whose offerings run the gamut of services to customers, whether online, by phone, through in-person assistance at brick-and-mortar branches, or some combination. Readers rated the strength of their broker’s customer service, how likely they are to recommend the firm to others and their overall satisfaction with the broker.

The overall winner is Fidelity Investments.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best full-service brokers.

Best Wealth Management

These firms take a holistic look at your finances and offer advice tailored to you. Beyond assisting with investment strategies, advisers may help you manage credit and debt, savings, estate and tax planning, and more. Readers rated wealth managers based on the quality of financial advice they received, the trustworthiness of the advisers, how likely they would be to recommend the firm to others and their overall satisfaction with the wealth manager.

The overall winner is Fidelity Wealth Management.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best wealth management services.

Best Cash Back Credit Cards

Cash back cards usually offer simple terms and the opportunity to earn rewards on everyday purchases. We asked readers to rate cash back cards on the responsiveness of customer service, how likely they would be to recommend the card to others and their overall satisfaction with the card.

The overall winner is Fidelity Rewards Visa.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best cash back credit card.

Best Travel Rewards Credit Cards

These cards typically offer extra points or miles on travel spending. And many heap on additional perks, such as statement credits for hotel, airline or dining purchases. Readers rated travel rewards cards on the strength of customer service, the likelihood they’d recommend the card to others and overall satisfaction.

The overall winner is the Platinum Card® from American Express.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best travel rewards credit card.

Best Airline Card Rewards Programs

Airline credit cards reward brand loyalty. You’ll get miles or points for every flight you book with the airline, and with some programs, you can earn free airline tickets, access to airport lounges and other travel perks. We surveyed readers in three areas: strength of customer service, whether they would recommend the credit card program to others and overall satisfaction.

The overall winner is the Southwest Airlines credit card rewards program.

Read our full guide: Kiplinger Readers' Choice Awards 2025, airline credit card rewards programs.

Best Hotel Credit Cards Rewards Programs

As with airline card programs, hotel credit card programs reward you for being loyal to a particular hotel chain. The more you stay, the more perks you can receive, such as free nights, upgraded rooms, late checkouts and more. These hotel credit card programs earned top marks from our readers, who rated the programs on the strength of customer service, the likelihood they’d recommend the program to others and overall satisfaction.

The overall winner is the Marriott Bonvoy credit card program.

Read our full guide: Kiplinger Readers' Choice 2025, Hotel Credit Card Rewards Programs.

Best National Banks

These large institutions have a presence in many states and offer branches where you can conduct transactions. We assessed readers’ overall satis­faction with their bank, their opinion of its customer service and the like­lihood they would recommend the bank to others.

The overall winner is Chase Bank.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best national banks.

Best Internet Banks

Internet banks often provide higher yields than their brick-and-mortar counterparts. The reason? Internet banks don’t have physical locations, so their overhead costs are lower, allowing them to pay out better rates. Survey respondents judged these institutions on customer service, how likely they would be to recommend the bank to others and how satisfied they are overall with the bank.

The overall winner is Charles Schwab Bank.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best internet banks.

Best Auto Insurance Companies

We asked readers to weigh in on auto insurance, judging their primary provider based on how competitive the rates are, their experience with filing claims and how likely they are to recommend the insurer to others. The following companies stood out from the rest in our survey.

The overall winner is USAA.

Read our full guide: Kiplinger Readers' Choice Awards 2025, auto insurance companies.

Best Homeowners Insurance Companies

Readers rated their homeowners insurance provider based on how competitive the rates are, how positive the experience is when filing a claim and how likely they would be to recommend the insurance company to others. Most of the providers that collected accolades for homeowners insurance are also honorees for their auto insurance services.

The overall winner is USAA.

Read our full guide: Kiplinger Readers' Choice Awards 2025, homeowners insurance companies.

Best Annuity Providers

Annuities are contracts that allow you to pay an amount up front or over time in exchange for the opportunity to create a steady stream of income in retirement; they may be fixed or variable, and they may provide income immediately or in the future. We asked readers to assess their annuity provider based on customer service, their overall satisfaction with the company and how likely they are to recommend it to others.

The overall winner is New York Life.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best annuity providers.

Best Tax Software

These programs guide taxpayers through the ins and outs of preparing and filing a tax return. The offerings vary depending on your return’s complexity and whether you want help from a tax pro. We asked readers to rate their preferred tax-filing software based on ease of use, how likely they are to recommend the service to others and overall satisfaction with it.

The overall winner is FreeTaxUSA.

Read our full guide: Kiplinger Readers' Choice Awards 2025, tax software.

Best Peer-To-Peer Payment Apps

Peer-to-peer payment apps allow you to digitally send and receive money with friends and family from your smartphone. We asked readers to evaluate their preferred payment app’s ease of use, their overall satisfaction with it and how likely they are to recommend it to others.

The overall winner is Apple Cash.

Read our full guide: Kiplinger Readers' Choice Awards 2025, best peer-to-peer payment apps.

How Readers Chose Their Winners

Kiplinger readers were invited to take the Readers’ Choice Awards survey on Kiplinger.com between February 20 and March 21, 2025. The survey asked respondents to choose the financial product or service that they most frequently use in 13 categories: full-service brokerage firms, wealth managers, cash-back credit cards, travel rewards credit cards, airline credit card rewards programs, hotel credit card rewards programs, national banks, internet banks, auto insurers, homeowners insurers, annuity providers, tax software and peer-to-peer payment services.

We asked readers to rate each provider they selected on a scale of one to 10 based on a few criteria. In many categories, readers rated the strength of customer service, how likely they would be to recommend the product or service to others, and how satisfied they are overall with the provider.

In some categories, we included more-nuanced criteria. With wealth management firms, we asked respondents to rate the trustworthiness of a firm’s advisers and the quality of its financial advice. For peer-to-peer payment apps and tax software, respondents evaluated ease of use, and for auto and home insurance companies, readers judged the competitiveness of rates and strength of the claims experience.

We calculated an average (mean) score for each criterion with each provider. We also calculated an overall mean score for all providers for each criterion we asked readers to judge. We compared individual provider mean scores with the overall mean, and the three highest-scoring pro­viders that had a score above the overall mean won an “outstanding” accolade; in cases of a tie, more than three providers are named, and if fewer than three qualifying providers achieved an above-average score, only those providers are named “outstanding.”

In each category, providers are generally listed in descending order by the number of criteria for which they received the “outstanding” designation — so a product or company that is deemed “outstanding” in three areas, for example, is listed before a provider with one or two “outstanding” awards.

To choose an overall winner in each category, we added together the mean scores for each criterion rated for each product or service. The provider with the highest total score in each category took the prize for overall winner.

Kiplinger Readers' Choice Awards Categories

• Readers' Choice Full-Service Brokers
• Readers' Choice Wealth Management
• Readers' Choice Cash Back Credit Cards
• Readers' Choice Travel Rewards Credit Cards
• Readers' Choice Airline Credit Card Rewards Programs
• Readers' Choice Hotel Credit Card Rewards Programs
• Readers' Choice National Banks
• Readers' Choice Internet Banks
• Readers' Choice Auto Insurance Companies
• Readers' Choice Homeowners Insurance Companies
• Readers' Choice Annuity Providers
• Readers' Choice Tax Software
• Readers' Choice Peer-to-Peer Payment Services

About the Kiplinger Readers’ Choice Awards 2025
The Kiplinger Readers’ Choice Awards aim to recognize and celebrate the best products and services in the personal finance arena. We asked you, our Kiplinger community, to help us name the products and services you think have delivered excellent value in the past year.

The survey results, which we’re sharing here in our second annual Readers’ Choice Awards, offer valuable insight into which providers shine when it comes to your everyday interactions and experiences with them. Our Awards recognize excellence in everything from credit cards, banks and brokers to insurers, tax software and financial apps. For each category, we’ve listed an overall winner that earned the highest score. We’ve also highlighted other products and services that earned above-average scores for various criteria we asked readers to assess.

By voting, our community has helped us form our guide to the very best financial products. These are the products and companies that you think stand out from the crowd.

Kiplinger Readers' Choice Awards: Auto Insurance Companies

We asked readers to weigh in on auto insurance, judging their primary provider based on how competitive the rates are, their experience with filing claims and how likely they are to recommend the insurer to others. The following companies stood out from the rest in our survey.

OVERALL WINNER: USAA

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

Readers praised USAA’s auto insurance offerings, rating it highly on the criteria we asked survey respondents to assess. “Their response to claims is superb and second to none,” says one reader. Many chimed in to say that they have been with USAA for decades with no problems. “Always available to answer questions. They provide rapid and excellent service,” says another reader.

USAA’s nationwide membership is available to military servicemembers and veterans, as well as their spouses and children. Those who have an auto insurance policy with USAA can take advantage of various discounts, including up to 10% off for bundling auto and homeowners policies, lower rates for teens who maintain high grades, and a discount of up to 3% if you set up automatic payments of your insurance premiums.

USAA’s mobile app provides a range of features—you can pull up your auto insurance identification card, change your coverage, pay bills, request roadside assistance, and file and manage claims, among other options.

Erie Insurance

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

Readers had positive words for Erie all around, complimenting its strong customer service and competitive rates. Survey respondents also liked Erie’s Your Turn app, which allows drivers to earn money (which they can exchange for gift cards) based on their driving performance.

Other notable features include First Accident Forgiveness, meaning you won’t face a surcharge on your premium the first time you’re at fault in an accident if you’ve been an Erie customer for three or more years. (Note that this program isn't available in all states.) Also, the longer you go without filing a claim, the lower your deductible may get. For each consecutive policy year in which you don’t file a claim, your deductible will be reduced by $100 (up to a maximum amount of $500) in most states.

Erie serves 12 states—Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin—as well as Washington, D.C.

Amica

Outstanding for:

• Claims experience
• Most recommended

Amica also has plenty of loyal customers—one in three has been insured with the company for more than 20 years. “Been an Amica customer for about 40 years—will die one. When you need it, nobody is better than Amica,” says one reader.

You can save on your auto premiums with Amica by bundling home and auto insurance plans or by staying with the insurer for more than two years. The longer your relationship with Amica, the more savings you may qualify for. And you can save up to 25% when you insure two or more cars.

Travelers

Outstanding for:

• Competitive rates

Readers favor Travelers auto insurance for its competitive rates. A typical monthly rate for full coverage auto insurance with Travelers is around $161, according to MarketWatch. This is significantly below the national average of $203 per month. For minimum coverage, the average monthly rate is around $57.

Kiplinger Readers' Choice Awards Categories

• Readers' Choice Full-Service Brokers
• Readers' Choice Wealth Management
• Readers' Choice Cash Back Credit Cards
• Readers' Choice Travel Rewards Credit Cards
• Readers' Choice Airline Credit Card Rewards Programs
• Readers' Choice Hotel Credit Card Rewards Programs
• Readers' Choice National Banks
• Readers' Choice Internet Banks
• Readers' Choice Homeowners Insurance Companies
• Readers' Choice Annuity Providers
• Readers' Choice Tax Software
• Readers' Choice Peer-to-Peer Payment Services

Car insurance companies spend a lot of time explaining the different types of car insurance and why you need all that coverage. They spend decidedly less time explaining which types of insurance you don't need or how to avoid overpaying for excess coverage.

That's where the 100,000-mile rule in car insurance comes in. The general rule isn't perfect, but it's a useful starting point to help you figure out how much car insurance you need and what types of coverage you should skip.

The idea behind the rule is to avoid paying for additional coverage that, because of your car's market value, you can't really benefit from, anyway. While not having enough coverage is definitely a risk worth avoiding, it's just as important to avoid paying for more coverage than you need or more coverage than you can use.

Not only are the higher premiums that come with that unnecessary coverage a waste of money, but that's money that would be better put in a high-yield savings account or CD to cover your out-of-pocket costs in a car accident or maybe save for your next car if your current ride is getting ready to retire.

To keep your car insurance premiums from soaring, here's a breakdown of the 100,000-mile rule and some tips for figuring out the right amount of coverage for your car.

What is the 100,000-mile rule in car insurance?

The 100,000-mile rule refers to the general recommendation to drop collision and comprehensive coverage on cars once they've passed the 100,000-mile mark. By dropping the extra coverage, you stand to save hundreds on car insurance while theoretically not exposing yourself to much more risk.

The logic behind the rule is that as a car gets older or racks up more mileage, its market value goes down. Insurance companies won't pay more for a claim than the current market value of your car, and once you have an accident in which the cost of repairs is higher than the market value, your car will be declared totaled.

Even if the repair is an easy enough fix and you still want to drive your car after it's been totaled, you can only get liability coverage for the car going forward, not collision or comprehensive coverage.

Because of those limitations, there's a point at which the cost of coverage isn't worth the low maximum payout. While there are a lot of factors that go into the market value of a car, the 100,000-mile mark is the tipping point at which you want to start re-evaluating your coverage.

Regardless of mileage, you should always re-shop your car insurance ahead of each renewal to make sure you're getting the best price for the coverage you need. Start your hunt by comparing quotes with our Bankrate-powered tool below:

What coverage do you lose if you drop collision and comprehensive insurance?

The 100,000-mile rule refers specifically to dropping collision insurance and comprehensive insurance. No matter what the mileage on your car is, you'll need liability insurance at a minimum.

But collision and comprehensive insurance are optional forms of coverage used to pay for damages to your car in an accident in which you're at fault (in the case of collision insurance) or, in the case of comprehensive insurance, when your car is damaged in other ways, such as a hailstorm or a tree falling on it.

Even if you don't have these optional types of insurance, your car would still be covered by the liability insurance of the other driver in accidents in which you're not at fault. Canceling this extra coverage doesn't leave you completely unprotected, and you'd still be able to legally drive your car.

How to figure out the right time to drop collision and comprehensive coverage

It would be convenient if the 100,000-mile rule were a hard, universal guideline that applied to every car in every situation. Unfortunately, there are a lot of variables beyond mileage that will determine the right time to drop down to minimum coverage.

Instead of immediately dropping the extra coverage the second you cross the 100,000-mile mark, use that milestone to answer these five questions:

1. Are you leasing the car?

If you're leasing, the 100,000-mile rule probably doesn't apply. Many leasing agents require drivers to keep full coverage, which typically includes collision and comprehensive coverage.

2. Are you still paying off the car loan?

As with leasing agents, some lenders might require you to maintain full coverage until your loan is paid off. If you're still making payments, check with your lender about its insurance requirements before you start doing the math on whether the extra coverage is still worth it.

3. What is the current market value of your car?

You can use tools from sites such as Carfax or Kelley Blue Book (KBB) to estimate the current market value of your car. Remember, this number is the estimate of what you could get for it if you were to sell your used car in its current condition to a driver living in your same town.

Car insurance companies have their own methods of calculating market value, so the Carfax or KBB estimate you get might not match the one your insurer comes up with after you file a claim.

As long as you're honest about the current condition of the car, the estimate from these websites is typically close enough for the purpose of deciding whether it's worth keeping collision and comprehensive coverage.

4. How much would it cost to repair the car after an accident?

This one is a little harder to calculate because you don't know exactly what repairs would be needed in this hypothetical accident, and repair costs vary widely across different makes and models.

As a starting point, use the car repair costs estimate tool from AAA or the Napa Auto Care Repair Estimator to get a ballpark figure on various types of repairs. Alternatively, you can contact local collision repair centers to ask about average costs.

Compare these repair costs to your current market value. If many of them are close to or higher than your car's estimated value, it might be a good time to drop collision and comprehensive coverage because the odds of your car being declared totaled are high.

5. What's your plan in the event of an at-fault accident?

While canceling that extra coverage might make sense on paper, the decision ultimately comes down to how you would handle an at-fault accident or other unexpected event damaging your car.

Even on older cars, the few thousand you would get if it were declared totaled could be enough for a down payment on a new car if you were to keep your collision and comprehensive coverage.

If you have enough in savings right now to cover a down payment if you needed to, that might not be worth the higher premiums — especially when the money you save by dropping coverage could further boost your savings.

But if you wouldn't be able to pull together a down payment right now, or doing so would force you to tap into other funds such as retirement savings or your home equity, it might be worth the extra premium payments just to know that, in the worst-case scenario, you'd get the cash you need to buy a new car.

Still, check the market value of your car at least once a year. If it reaches the point when the market value is close to your deductible, it’s probably time to drop the optional coverage, regardless of any other factors.

Related content

• Is Your Car Model Driving Up Your Insurance Premium?
• My Teen Crashed His Car, and Now Our Insurance Has Tripled. What Now?
• Your End of Year Insurance Coverage Review Checklist
• Luxury, Exotic and Classic Car Insurance: How To Get the Best Coverage

Are you “that guy” who keeps filing insurance claims and raising the rates for all of us? What’s happening there, and how can we deal with it?

Before we get into exploring this issue, let’s all agree that somebody who files auto insurance claims will be charged a higher price than somebody who does not. I mean, if an insurance company has to keep paying out dollars for claims by one person, that person’s premium should reflect that.

Just like the person who never files a claim should pay less for the same coverage. Fair?

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

Would it surprise you to know that some people file claims over and over again over the years, and some people simply don’t? It’s true.

Some drivers show a pattern of frequent claims, often for the obvious reasons such as aggressive driving habits, living in a congested area or driving a ton of miles. So sure, we can understand that these folks may have to file more claims.

Money probably plays a part

But what if I told you that even with the same external factors listed above, there remains a clear delineation between claim filers and non-filers. So what gives?

There are several factors at play here. One may be as simple as financial strength. A driver with access to cash may file fewer claims because they have the money to pay for the damage themselves, especially for smaller issues. The “why get a mark on my driving record?” resonates with them, and they have the means to protect that driving history.

Others, even if they wanted to, simply cannot absorb a loss without filing a claim.

It could be bonus hunger

There’s also this thing called bonus hunger, a psychological phenomenon where certain personality types will chase discounts. This is also known as medium maximization. In some cases, an individual who can’t afford not to file a claim may decide not to (and just let their car remain damaged), all in the name of keeping a claim-free discount or maintaining their perceived proof of “good driving.”

OK, so what does all this mean? Keep reading, I promise the payoff is coming. The end result will be a way for you to save money on your car insurance.

So, say we have the same set of circumstances for two hypothetical drivers — same city, same ZIP code, same limits of coverage, same car, same driving habits, same credit score. Everything is the same except for one thing. These two people — or risk profiles, as an insurance company would view them — have a very discernable difference in their propensity to file a claim. One will file over every little ding. The other will not. And every time the first guy files a claim, he contributes to the issue of everyone’s rising rates.

What’s to be done about it?

Those little bumps on your car are annoying. Say you come back after grabbing your to-go Starbucks and find someone has brushed the side of your shiny new bumper. You have choices here. As Marcus Aurelius said in his famous diary, Meditations, “You don’t have to turn this into something. It doesn’t have to upset you.”

You don’t have to file a claim. Sure, you want the bumper to be like new, and you don’t want to pay for the fix yourself, but you could choose to be like Marcus and just leave it be. After all, everything still works the way it’s supposed to, and all there is is a little scratch that most people won’t even notice.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.

This is the first step in transforming yourself from a claims filer to a claims non-filer, and by doing that, you get to enjoy the benefit of lower auto insurance premiums.

I’m not saying to let it go if your car is bashed and looks like a Transformer halfway through the process of transforming, or if the damage has made your vehicle unsafe. I’m talking about the stuff that really only you see, or only you want fixed on principle.

That principle will cost you in your claim history, which will translate into higher auto insurance rates.

Be like Marcus.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Car insurance companies have been offering drivers ways to lower their car insurance premiums by using apps. These programs typically involve downloading an app that tracks your driving habits or mileage, with insurers promising potential discounts in exchange for the data collected.

But some drivers have been surprised to learn that unrelated apps are also collecting and sharing driving data, sometimes resulting in higher insurance rates. Even navigation, shopping and weather apps can track movement patterns that may be linked to driving behavior.

In some cases, this data is sold to third parties or data brokers, who then provide it to insurers. In today’s world of widespread app use, privacy and data sharing are growing concerns. We break down how this data is collected, who’s using it and what you can do to protect yourself.

How apps that track driving behavior collect data

Car insurance companies are using telematics, systems that monitor your driving, to learn about your driving habits. These smartphone-based insurance programs typically require you to download an app and allow it to track your behavior while you drive.

The apps collect a range of data, including your location, speed, how often you brake hard and whether you use your phone while driving. Some also track mileage, the time of day you drive and how frequently you're on the road.

While drivers may expect apps that track driving behavior to share data with their insurance companies, many are surprised to learn that other, unrelated apps are collecting and sharing similar data without their knowledge.

Life360, for example, is marketed as a location-tracking app designed to help families monitor each other’s whereabouts for safety. But in January 2025, Texas Attorney General Ken Paxton sued Allstate and its data affiliate, Arity, alleging they “unlawfully collected and sold data about the location and movement of Texans’ cellphones through secretly embedded software in mobile apps, such as Life360.” The lawsuit claims Allstate paid app developers to include its software, allowing the company to track and sell consumer driving data.

Other apps may be doing the same. According to Edmunds, apps like GasBuddy, which tracks local fuel prices, and MyRadar, a weather app, can use your phone’s motion sensors to monitor your driving. That data can then be analyzed and sold to third parties.

How driving data affects insurance rates

Car insurance companies review driving data to assess how risky a driver you are. Frequent hard braking or speeding, for example, may be seen as signs of risky behavior. The time of day you drive also matters; driving late at night or during rush hour can raise your chances of an accident, increasing the risk for insurers.

Insurance companies promote driving behavior apps as a way to earn lower premiums, rewarding safe drivers with potential discounts. But these apps don’t always work as intended. Reviews of Progressive’s Snapshot app often mention inaccurate tracking and mis recorded trips, which can result in unexpected rate increases.

If you’re not aware that your driving is being tracked, you could face higher premiums without knowing why. Some Life360 users, for instance, have reported unexplained premium hikes.

According to Edmunds, one user, Kathleen Lomax, didn’t realize her driving data was being collected until she contacted the company and learned that Life360 shares data with Arity. Arity can then sell that data to auto insurers, who may use it to generate individual driving scores that affect rates.

How to protect your driving data

There are several ways to help keep your data safe and limit the data that your car insurance company can access.

• Carefully choose your apps: Before installing a new app, thoroughly read its terms and conditions, and pay close attention to the privacy statement and sections on data collection and sharing. If you’re not comfortable with the terms, don’t download and use the app.
• Opt out of data sharing: Some apps offer you the option to opt out of allowing your data to be shared. Using this feature can help protect your data.
• Request a LexisNexis Consumer Disclosure Report: You can request a LexisNexis Consumer Disclosure Report online. It’s free to request a report, and the report can help you identify the types of data that are being shared.
• Use Privacy4Cars tools: Privacy4Cars offers several tools for consumers, including an option to request a vehicle privacy report to see what data your car is collecting. The Privacy4Cars app includes an option to delete your personal information from vehicles.

If you're uncertain about an app your car dealer recommends or your insurance company promotes, take the time to ask questions before downloading it. Understanding what data an app collects, how it’s used and who it’s shared with can help you make an informed decision.

It’s far easier to avoid sharing your data in the first place than to try to undo it later. When in doubt, err on the side of caution. If an app seems questionable or unnecessary, the safest choice is to skip it entirely. Your personal data and your insurance premiums could depend on it.

Use the tool below, powered by Bankrate, to explore some of today's best auto insurance offers:

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Did you know your local independent insurance agent of broker can kick you to the curb if they are so inclined? Why in the world would they want to get rid of someone who generates income for them?

Here are the top five reasons why your insurance agent or broker may tell you to take a hike.

1. Being abusive to the agent and staff

I get it. You are contacting your insurance agent or broker only when there is an issue. You need to add a new car, or you have a claim. Rarely do you just pick up the phone or shoot over an email that says, “Hey, thanks for being there, buddy!”

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However, that doesn’t give you a reason to be a jerk. You’re talking with people, other human beings, with feelings, families and lives of their own. Yes, you are the customer, and the customer is always right, but that is not to the exclusion of all decency.

Pro tip: Remember this the next time you’re interacting with your insurance professional — you’re talking to a person. Imagine you are face-to-face, not behind the protection of your keyboard or cellphone.

2. Asking the same questions over and over

Sometimes you have a question about your insurance policy, or a claim, or a billing issue, or any number of things. Totally legit, totally OK, and that’s what your agent or broker is there to assist you with.

When it gets to be a problem is if you can’t, or won’t, remember what you’ve been told. It can go something like this:

• Monday. You ask your agent if you can let your neighbor drive your car for an emergency. You get the answer.
• Thursday. You call your agent again to find out if you let your neighbor borrow your car, will your policy cover them? Answer given.
• Following Tuesday. You email your agent to say your neighbor took your car to the market. Is that OK? Answer given.

There is nothing wrong with asking the question, but if you’re asking the same question over and over and over … Well, you can see how that may drive your licensed insurance professional bonkers.

Pro tip: If you have a bad memory, take notes.

3. Not paying your bills

Your insurance policy costs money, not unlike pretty much everything you buy in this world. And if you don’t pay the premium, then, big surprise, the insurance policy will be canceled.

If you have a credit card with a balance, all is good as long as you make the payments. But if you stop paying, the card issuer will cancel the card, and you’ll be sent to collections. Not good stuff.

When your insurance policy is canceled, there is this thing called Murphy’s Law that says that the moment you have a lapse in your insurance coverage, you will have a loss and need your insurance.

This puts you in a precarious situation and your insurance professional is stuck having to deliver the news to you that you don’t have insurance because you didn’t pay the bill. Not a conversation anyone wants to have.

Pro tip: If you can’t remember to pay the bill, consider using automatic payment plans, such as auto-debiting from your checking account or even charging a credit card (get those rewards points!).

4. Leaving unfounded or angry online reviews

Picture this: You’re upset that your auto insurance premium increased. Mind you, this has literally nothing to do with your insurance agent or broker — they don’t set the rates.

You’re ticked off and go online and leave a review on Yelp or Google that skewers your agent or broker specialist for charging you too much when the car accident you had was not your fault.

You make Yelp happy with a detailed recounting of your situation and smash that one-star button. Ha!

Later, when you call your agent with a billing question, you’re surprised that the person you burned isn’t super friendly with you?

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Pro tip: Don’t complain about your insurance agent or broker online. If you have a problem, reach out to them to talk it over or find a new agent.

5. Being in the 20% of the 80/20 rule

The 80/20 rule is well known in the business world. It posits that 80% of your time is taken up by 20% of your clients. That means that when the phone rings at your agent’s office, 80% of the time it is someone who calls a lot. Over. And over. And over.

I can’t explain why this happens. However, I can attest to the fact that the phenomenon is real. Some people call their insurance agents and brokers, and some just don’t.

If you find yourself knowing your agent or broker’s phone number or email by heart, you may be in that 80%. And your agent or broker does not love that about you.

Insurance agents and brokers are running businesses. Like all businesses, there are finite resources. If you’re using up the lion’s share of those resources, you leave other customers, and the business owner, at a disadvantage. It leads to an overall bad experience for everyone.

By all means, utilize your insurance guru — that’s why you chose to purchase through a person, not a machine or online.

Pro tip: Remember that there are others like you who have chosen the same insurance agent or broker and deserve the attention we all want.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Americans faced 5,430 severe hail events last year, according to the National Weather Service Storm Prediction Center Annual Severe Weather Report Summary. And that's considered a relatively mild year for hailstorms, with the count topping 7,300 in 2024 and over 10,000 in 2023.

The point is: Hail happens often, especially if you live in the Midwest. And the damage these natural disasters cause adds up. According to a 2023 analysis by State Farm, the major insurance agency paid out $3.5 billion in hail-related claims that year. That's just one insurer in one year.

Hail can dent vehicle exteriors and crack windshields, as well as damage your home's roof, gutters and windows.

Fortunately, your home and auto insurance policies can help cover some of the costs of repairing your home or vehicle. To maximize your insurance payout, you'll need to be sure to meet your insurer's claim requirements.

In some cases, it may make more sense to pay for the damage out of pocket, so before you file a hail damage claim, take a moment to review whether it will pay off.

Is a hail damage insurance claim worth it?

Before you file a hail damage claim, start by reviewing your insurance policy. Most homeowners insurance policies and comprehensive auto insurance policies cover hail damage. Confirm that you have coverage for hail damage but also review your deductible to decide if you should file the claim.

Your insurance deductible might be as small as a few hundred dollars or it could be several thousand dollars. Whatever you've set it at, consider whether the cost of the hail damage will exceed the deductible.

For example, if you have a $4,000 deductible and your home has sustained only minor damage, it may make more sense not to file a claim. You'll be paying the bulk of the repair costs out of pocket anyway, so there's no reason to add a claim to your record.

You'll also need to consider potential rate increases and long-term implications. Filing a claim can also cause an insurer to increase your premiums. Insurers base your rates, in part, on how likely you are to file a claim. So, the logic is that if you've filed one in the past, you're more likely to file another one in the future. The insurer may raise your rates as a result.

If you have multiple claims in a short period, you might even face a nonrenewal or cancellation down the road if you file another claim now as the company decides you're too risky to insure.

Generally speaking, it makes sense to file a hail damage insurance claim when the damage is substantial and will cost more than your deductible to repair. If you have minimal damage and the repairs are affordable, you may decide to pay for the repairs yourself, avoiding any insurance premium increases.

How to file a hail damage insurance claim

If you decide a hail damage claim is worth it, you should immediately document the damage to your home or car right away. Take clear, detailed photos and videos from different angles and include a timestamp.

Try to estimate the size of the hail and take photos of the hail with a common object, like a dollar bill, for a size reference. Keep your photos and videos organized and label them so you can easily access them. Make sure to write down the date and time when the damage occurred, too.

Next, file the claim with your insurance company. To get an insurer to pay your claim after a natural disaster, it's important to file quickly. Many insurance companies now have apps that you can use to file a claim, and you can often upload photos right within the app.

If you have questions about the claims process, you can also file a claim over the phone. Be sure to record the representative's name and date of the call, and take detailed notes about any next steps.

If this is your first claim, pay attention to how the claims process was. Was it a smooth process, or was it overly complicated and riddled with unhelpful customer service every step of the way? If your current insurer made filing this claim a headache, it may be worth shopping around ahead of your next renewal to see if you can find better rates (and service) elsewhere.

For car insurance, you can start your search with our car insurance comparison tool, powered by Bankrate:

Tips for working with adjusters on your hail damage insurance claim

Once you've filed a claim, your insurance company will usually schedule a time for an adjuster to come out and review the damage in person. In the meantime, contact local contractors or auto repair specialists to get quotes of your own. Try to gather three quotes in writing for the repair costs.

During your appointment with the adjuster, you can share your photos and videos and the repair quotes that you’ve gathered. The adjuster will review the damage, estimate the repair costs, and prepare an initial claim offer.

You don't have to accept the initial claim offer if it doesn't cover all of the work and expenses that the contractors included in your estimates. You can contact the adjuster again and highlight the differences in cost, and they may be willing to increase the offer.

If you don't reach an agreement with the adjuster, you have several other options:

• Hire a public adjuster: A public adjuster works to help you get the claim amount that you're entitled to. When hiring a public adjuster, look for someone local and research the company's reputation. Public adjusters charge a percentage of the claim payout that you receive in exchange for their service.
• Contact your state's insurance commissioner’s office to file a dispute: Your insurance commissioner can advocate for you and can work to reach a claim payout agreement that's fair.
• Hire a lawyer to represent you: A lawyer can negotiate with the insurance company on your behalf and may be able to secure an agreement that covers your repair costs. If the lawyer can't reach that agreement through negotiation, they can represent you in court. Hiring a lawyer can be very expensive, so this option makes the most sense if your house has sustained extensive damage and you have a very expensive claim.

How to complete the insurance claim process

Once you've agreed on a payout amount, sign the claim agreement to finalize the claim. Your insurance agent will inform you how you'll receive payments, whether you'll receive one or more checks in the mail or the insurer plans to pay the contractor directly.

Your insurance company may recommend local professionals who can repair your home or car. But you have the right to choose your own contractor or repair shop. You might decide that one of the contractors you received a quote from is right for the job, or you can continue speaking with local contractors until you find one you trust. Be sure to ask the contractors about their timelines, including when they'll be able to start and finish work.

Dealing with hail damage is an inconvenience, but filing a claim with your insurance company can help pay for many of the costs involved. By properly documenting the damage and being prepared to work with the adjuster, you can maximize your claim payout to cover most of your repair costs.

Compare some of today's top home insurance offers with the tool below, in partnership with Bankrate:

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You might think an unpaid traffic ticket is a minor inconvenience, something you can ignore until a warning pops up in the mail. But for some drivers, those unpaid fines have snowballed into six-figure lawsuits, suspended registrations and skyrocketing insurance premiums that stick around long after the last court date.

Just ask the drivers recently sued by the District of Columbia. According to a lawsuit filed by Washington Attorney General Brian Schwalb, five Maryland and Virginia drivers racked up more than $1 million in unpaid traffic tickets while repeatedly speeding, running red lights and driving recklessly through the city.

The city is suing under the False Claims Act, alleging the drivers intentionally dodged payment while continuing to operate vehicles on D.C. streets. It’s a legal tactic usually used for fraud cases, now being applied to drivers whose behavior poses a financial and safety risk to the city.

Here’s how serious the reported violations are, according to the suit:

• A Maryland driver owes $187,200 for 344 traffic infractions. That includes 316 speeding citations, with 61 for driving more than 30 mph over the speed limit, which qualifies as aggravated reckless driving.
• A Virginia driver owes $77,100 for 244 infractions, including 202 for speeding. Eight were for driving more than 30 mph over the limit.
• Another Virginia driver owes $69,456 for 263 infractions, with 246 for speeding.
• A Virginia driver owes $58,608 for 197 infractions, including 163 for speeding.
• Another Virginia driver owes $31,316 for 159 infractions, which include 30 for speeding, 20 for running red lights and 15 for running stop signs.

A single ticket can mean years of higher insurance rates

Even if your city doesn’t take legal action, traffic violations can still hit your wallet, especially when it comes to your car insurance. Drivers with tickets or accidents on their record typically pay hundreds to thousands more per year in car insurance premiums.

Here’s how much a single incident could increase your insurance rate, according to WalletHub:

Worse, those increases don’t go away overnight. Most insurers will consider a serious violation for three to five years, meaning a $150 ticket could cost you thousands over time in car insurance premium hikes.

Explore some of today's best car insurance offers by using the tool below, powered by Bankrate:

The hidden consequences of ignoring a traffic violation

Beyond insurance, unpaid traffic violations can trigger a cascade of consequences depending on where you live:

• License suspension or vehicle impoundment
• Civil lawsuits or wage garnishment
• Credit score damage if sent to collections
• Difficulty renewing vehicle registration

In the Washington lawsuits, city officials say some drivers registered their vehicles in other jurisdictions to avoid enforcement.

How to get ahead of unpaid traffic fines before they spiral

If you’re sitting on a stack of unpaid tickets (or even just one), now’s the time to act.

Here are a few ways to protect your finances and keep your car insurance in check:

• Pay your fines promptly. Many cities offer early payment discounts or waive late fees if you settle quickly.
• Ask about payment plans. Some jurisdictions allow you to split large balances into manageable payments and keep your license in good standing.
• Take a defensive driving course. In some states, this can help reduce points or keep a ticket off your record.
• Shop around for insurance. If your rate goes up, don’t just accept the increase; some insurers offer better forgiveness programs than others.

The bottom line on traffic tickets

That $100 ticket might not seem urgent today, but if left unpaid, it could spiral into thousands in legal fees and a steep hike in your insurance premiums.

Don’t let a small mistake turn into a financial disaster. Pay your tickets, drive safely and keep your record clean.

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You may be wondering when it is appropriate to start shopping around for a new insurance policy. There is a right time — and, yup, there is an absolute wrong time. Let’s go over all of this so you can know when to take your policies to market, or not.

Here are four reasons it might be time to shop for a new policy.

1. Your premium increased significantly

I know that the first thing that goes through most folks’ minds is, when your insurance premium increases, it is time to shop for new insurance. While this can be true, everyone has to have a reasonable threshold before they start looking around for a new insurance company to partner with.

When is it enough is a truly personal choice. If your premium goes up $1, would you stop for a cheaper policy? What about $100? $500? $1,000? Rather than looking at the dollar amount, or even a percentage increase, look at how it may or may impact your bottom line.

If the amount is money you could have missed, then leave it be and move on. If it’s an amount that will force you to have microwave noodles for dinner rather than a well-balanced meal, then maybe it is time to see what options are out there.

2. You’re getting poor customer service

Did you recently call your insurance company, agent or broker with a question and find yourself in an endless loop of menus and unanswered voice messages?

While the availability of insurance products varies from state to state, and some areas are pretty tough to get a policy altogether, that doesn’t mean that you can let people off the hook for poor service. Look around for alternatives, whether it be your personal representative or the insurer behind them.

3. The policy terms changed or no longer suit your situation

Insurance policies are contracts, and they renew. That means that the terms you have now may not be the same when the policy expires. If you find that the terms of your policy have materially changed enough that they no longer suit your needs, time to move on.

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Although many insurance policies have a similar foundation, the details can be quite different. Where coverage may exist under certain circumstances with one company, another may directly and specifically exclude a loss of that type.

The insurance policy may have been an ideal fit for you 10 years ago when you purchased it. However, upon reviewing it now, you may find it is far from what you need.

4. You encountered a difficult or unsatisfying claim process

It may turn out that you had a pretty lousy experience when filing a claim with your insurer. Maybe the claims adjuster was a jerk, or the time it took to get things done was longer than you feel it should have been, or even worse, the insurer did not cover something you felt was within the policy terms. This is a very common time for people to start shopping around.

Why this is the worst time to shop around

Unfortunately, as common as this scenario is, this is the absolute worst time to go looking for new insurance. Here’s why.

You may have had the same insurance policy for decades and never filed a claim until now. While the claim is in process, the insurance company is doing what they do — checking on the damage, figuring out what is covered and what is not.

While your claims adjuster is walking that fine line between meeting your expectations and following the policy you purchased, you may say, “Well, enough of this, I’m going elsewhere.”

Any insurance company will not see you as a person who had been claim-free for years. Instead, they will see someone who just had a claim and are now looking to jump ship during the process.

You are inadvertently showing off your worst self, and it’s a double whammy:

• First, you are someone who has suffered a loss — certainly not the ideal client to an insurer.
• Second, if you’re looking to switch insurance companies with an open claim, it draws into question if that claim is being covered, or if you plan to try to file it with a new insurer with the hopes of a different outcome.

No matter how you crack it, post- or mid-claim are the absolute worst times to shop.

So when is the best time?

You may be wondering, then, when is the best time to shop around? The answer may surprise you. Unless there has been an astronomical event, be it a claim failure, price increase or change in policy terms, the majority of the time it is better to just stay put.

Yes, you read that right — just don’t shop. Unless there is a compelling reason to switch insurers, you may find that the yourself out of the frying pan and into the fire. After people shop for insurance, they typically end up just as unhappy as before, or sometimes more unhappy since they had to go through the process.

If you’re determined to shop around, the best circumstances are:

• When you haven’t had any claims
• When your driving record is clean

This is when you would look to an insurer like a good risk to take.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.