Personal Finance
How to mitigate rising auto and homeowners insurance costs
Mike Spiering holds Francesca Spiering as he stands in the flood water around his home after record rains fell in the area on April 13, 2023 in Hollywood, Florida.
Joe Raedle | Getty Images
The cost of insuring your most expensive assets has skyrocketed. While overall inflation has slowed, insurance costs are taking a bigger bite out of many household budgets.
The average annual rate for homeowners insurance increased by nearly 20% between 2021 and 2023 — and homeowners can expect another 6% increase in 2024, according to Insurify, a virtual insurance agent. That would bring the average policy cost to $2,522 by the end of the year.
Car insurance premiums have also shot up.
The average cost of motor vehicle insurance jumped 16.5% from August 2023 to August 2024, according to the Bureau of Labor Statistics. Bankrate estimates that in September the average cost for full coverage car insurance is $2,348 a year.
Several factors contribute to climbing home insurance rates, including increasing costs for homebuilding supplies and repairs, a significant rise in litigation around claims, and the greater frequency of weather-related events, said Shannon Martin, a licensed insurance agent and writer for Bankrate.
Extreme weather events, higher replacement and repair costs, and increased medical expenses after accidents have boosted car insurance rates, experts say.
Still, there are ways to mitigate rising premiums. Here are six strategies to consider:
1. Shop around for a new insurer
Consider switching to another insurance company. While most people stick with their car or home insurer from year to year, it’s wise to shop around, experts say.
About 37% of drivers say they will or have already received a quote from a new insurer in response to rising insurance rates, and 27% have or plan to switch insurance companies, according to a new survey by Autoinsurance.com.
Shop around for car and home insurance once a year to make sure the rates you’re paying now are still competitive, experts say. You might also want to compare rates if you have a life change that could affect your rate.
“If you move, get married or buy a new car, that’s also a good time to shop around,” said Maya Afilalo, an insurance analyst at Autoinsurance.com.
Even though extreme weather events have adversely impacted many insurers, companies are at different stages with how they have adjusted.
“So a company that you may be with now that may have a much higher rate than a company that’s kind of already in a recovery stage,” said insurance agent Mike Barrett, who owns the Barrett Insurance Agency in St. Johnsbury, Vermont. “Shopping could really save you some money.”
A view of burnt cars and structures as the wildfire of South Fork Fire continue in Ruidoso of New Mexico, United States on June 20, 2024.
Tayfun Coskun | Anadolu | Getty Images
Compare costs by getting quotes from a few insurers before renewing your policy. You can go online or use apps for insurance marketplaces to get quotes from several companies at once. Or you may want to talk with an independent insurance agent — doing so is typically free, because they usually get a commission from the insurer for selling you a policy. You can find an agent in your area through the Independent Insurance Agents and Brokers of America.
Lower premiums aren’t the only factor to consider. Check out AM Best and Demotech, which rate insurers’ financial strength and reliability.
“What you’re looking for is the financial strength of the carrier, which shows their ability to pay future claims, and also understanding what their history of paying claims has been in the past,” said insurance agent David Carothers, a principal at Florida Risk Partners in Valrico, Florida.
2. Increase your deductible
Your deductible is the amount of money you will have to pay out of pocket before the insurance company steps in. Raising your deductible can lower your car and home insurance premiums.
With car insurance, for example, “increasing your deductible from $500 to $1,000 can reduce optional collision and coverage premium costs by 15% to 20%,” said Loretta Worters, a vice president at the Insurance Information Institute.
But if you raise your deductible, you need to have enough money in an emergency fund to cover it.
3. Adjust your coverage
If you’ve been with the same insurance company for several years, you may have made changes that better protect your home from hazards — for example, a new roof, hurricane-impact windows or a security system — since taking out the policy. Updating your coverage to reflect those changes could save you money, experts say.
Reducing coverage on certain items, like jewelry or artwork, could also lower your homeowners premium.
Dropping collision and/or comprehensive coverage on older cars can also cut costs. You may want to consider dropping coverage if your car’s value is worth less than 10 times the premium, according to the Insurance Information Institute. But that means you’ll have to pay for any damages out of pocket if you’re in an accident or your car sustains damage due to weather, theft or another noncollision event.
“You might be responsible for paying for those damages to other property that isn’t covered by your insurance company. So you know, there’s some risk and reward there,” said Rod Griffin, a senior director at Experian.
Simpleimages | Moment | Getty Images
That said, experts say having enough insurance and the right kind of coverage may save you more money in the long run. Saving on premiums may ultimately be costly if you don’t have the type of insurance you need, such as flood insurance.
Just an inch of water can cause roughly $25,000 of damage to a property, according to the Federal Emergency Management Agency. Yet, most homeowners insurance explicitly excludes flood damage, and few people pursue that coverage. On average, about 30% of U.S. homes in the highest-risk areas for flooding have flood insurance, according to the University of Pennsylvania’s Wharton Risk Center.
Experts say you may need flood insurance even if you’re not in a high-risk zone.
“A lot of people don’t buy it because their bank doesn’t require them to and then all of a sudden, a hurricane comes. They’re not in a flood zone, according to a map, and we have a storm surge, and there’s all kinds of uncovered claims,” said Carothers of Florida Risk Partners.
4. Look for potential discounts
One of the most touted discounts is bundling coverage. You’ve likely seen many ads about purchasing home and car insurance from the same insurer to save money, but experts say that’s not always the case. You may find better rates using different companies.
“It’s really good to investigate both angles — bundling, not bundling — and always talk to your agent before you make big changes to your home or expensive changes that you think are going to save you money,” Bankrate’s Martin said.
Homeowners may get discounts for going claim-free for a certain period of time, or installing features that better protect their home from hazards.
Car insurance discounts range from safe driver and good student discounts to taking a defensive driving course. There are also discounts for older drivers and low mileage discounts for driving fewer miles than the average.
5. Keep up your credit score
Your credit history can also impact auto and home insurance rates. The higher your credit rating, the less you may pay for insurance in states where credit is a rating factor for insurance companies, experts say.
Having poor credit can significantly increase your insurance costs. For example, drivers with poor credit for full coverage insurance pay $4,349 a year compared with drivers with excellent credit who pay $2,033, according to a Bankrate report.
6. Price out insurance costs ahead of time
Factor insurance costs into your housing or car budget from the start. Pricing policies out early can help you avoid sticker shock at a point where it’s tougher to back out of a purchase.
Also, when you’re buying a home, consider the likelihood of extreme weather for a prospective property, which can mean you have a more limited choice of insurers and face higher prices for coverage. Some websites, like First Street and Climate Check, can give you a projection of the impact of extreme weather events on your home through 2050.
“You’re always putting yourself in a stronger position to price out your insurance before you get emotionally and financially involved,” Martin said.
— CNBC producer Stephanie Dhue contributed to this story.
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The Federal Reserve held interest rates steady at the conclusion of its policy meeting on Wednesday.
In what could be Jerome Powell’s last as chair before President Donald Trump’s yet-to-be-confirmed nominee Kevin Warsh takes the helm, central bankers maintained the federal funds rate in a target range of 3.5% to 3.75%.
Inflation has surged since the war with Iran began, leaving policymakers with limited room to act, according to Sean Snaith, the director of the University of Central Florida’s Institute for Economic Forecasting. “We’re in a kind of suspended animation — between Iran and the Fed transition,” Snaith said.
Before the oil shock, inflation was holding above the Fed’s 2% target but not worsening. Now the jump in energy costs could have longer-term inflationary effects, economists say.
For Americans struggling in the face of higher gas prices and overall affordability challenges, the central bank’s decision to keep interest rates unchanged does little to ease budgetary pressures. “The cavalry isn’t coming anytime soon,” Snaith said.
How the Fed decision impacts you
The Fed’s benchmark sets what banks charge each other for overnight lending, but also has a trickle-down effect on many consumer borrowing and savings rates.
Short-term rates are more closely pegged to the prime rate, which is typically 3 percentage points above the federal funds rate. Longer-term rates, such as home loans, are more influenced by inflation and other economic factors.
Credit cards
Most credit cards have a short-term rate, so they track the Fed’s benchmark.
After the Fed cut rates three times in the second half of 2025, the average annual percentage rate has stayed just under 20%, according to Bankrate.
“Without Fed rate cuts, there’s not much reason to expect meaningful declines anytime soon, so carrying a balance will remain very expensive,” said Matt Schulz, chief credit analyst at LendingTree.
Mortgage rates
Fixed mortgage rates, on the other hand, don’t directly track the Fed but typically follow the lead of long-term Treasury rates.
Concerns about how the Iran war will impact the U.S. economy have already pushed the average rate for a 30-year, fixed-rate mortgage up to 6.38% as of Tuesday, from 5.99% at the end of February, according to Mortgage News Daily.
That leaves homeowners with existing low mortgage rates “feeling stuck,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “Mortgages, more than any other credit type, work on a churn,” she said, referring to how a dip in rates can boost borrowing activity.
Student loans
Federal student loan rates are also fixed and based in part on the 10-year Treasury note, so most borrowers are somewhat shielded from Fed moves and recent economic uncertainty.
Current interest rates on undergraduate federal student loans made through June 30 are 6.39%, according to the U.S. Department of Education. Interest rates for the upcoming school year will be based in part on the May auction of the 10-year note.
Car loans
Auto loan rates are tied to several factors, including the Fed’s benchmark. Because financing costs remain elevated, new car buyers are taking on longer loans to keep their monthly payments manageable, according to the latest data from Edmunds.
Even so, with the rate on a five-year new car loan near 7%, the average monthly payment on a new car rose to $773 in the first quarter of 2026, an all-time high.
“Car buyers are in a tough spot right now because they’re getting squeezed from both ends: high sticker prices and high interest rates, with neither showing any signs of letting up,” said Joseph Yoon, consumer insights analyst at Edmunds.
“Until the rate picture shifts, buyers will keep stretching loan terms to make payments work, which only adds to the total cost of ownership down the road,” Yoon said.
Savings rates
While the Fed has no direct influence on deposit rates, the yields tend to be correlated with changes in the target federal funds rate. So, although rates on certificates of deposit and high-yield savings accounts have fallen from recent highs, they are holding above the annual rate of inflation.
For now, top-yielding online savings accounts and one-year CD rates pay around 4%, according to Bankrate.
“Yields on high-yield savings accounts and certificates of deposit are down from their peaks of a few years ago, but they’re still strong compared to what we’ve seen for most of the past decade,” Schulz said.
Milan Markovic | E+ | Getty Images
The average tax refund is 11.2% higher this season, compared with about the same period in 2025, according to the latest IRS filing data.
As of April 10, the average refund amount for individual filers was $3,397, up from $3,055 about one year ago, the IRS reported on Friday.
The IRS data reflects about 114 million individual returns received, out of about 164 million expected through Tax Day. Next week’s filing update is expected to include data through the April 15 deadline.
President Donald Trump‘s 2025 legislation, rebranded to the “working families tax cuts,” was a key talking point for Republicans on Tax Day.
With the November midterm elections approaching and Republicans defending slim majorities in Congress, many GOP lawmakers have highlighted Trump’s tax breaks and higher average refunds.
Meanwhile, affordability has been top of mind for many Americans amid rising costs of gas, electricity, food and other living expenses.
For filers who expected a refund this season, nearly one-quarter, or 23%, planned to use the funds to pay down credit card debt, and the same share said they would save the payment, according to the CNBC and SurveyMonkey Quarterly Money Survey, released in April. It polled 3,494 U.S. adults at the end of March.
Who benefited from Trump’s ‘big beautiful bill’
“It’s been a great tax season for the American people,” many of whom have benefited from Trump’s tax breaks, Treasury Secretary Scott Bessent said during a White House press briefing on Wednesday.
More than 53 million filers claimed at least one of Trump’s “signature new tax cuts” — the deductions for tip income, overtime earnings, seniors and auto loan interest — the Department of the Treasury also announced on Wednesday.
Those filers, who claimed the deductions on Schedule 1-A, have seen an average tax cut of over $800, according to the Treasury. Tax cuts can trigger a higher refund or reduce taxes owed, depending on the filer’s situation.
Some filers who itemize tax breaks have also seen benefits from the bigger federal deduction limit for state and local taxes, known as SALT. Trump’s legislation raised that cap to $40,000, up from $10,000, for 2025.
The latest SALT deduction limit change is expected to primarily benefit higher earners, according to a May 2025 analysis of various proposals from the Tax Foundation.
The Treasury has not released data on how many filers have claimed the SALT deduction during the 2026 filing season.
Traders work at the New York Stock Exchange on April 16, 2026.
NYSE
U.S. stocks climbed to record highs on Thursday against a backdrop of war, an oil supply shock and economic forecasts warning of stunted growth amid a protracted conflict.
Many investors may be thinking: Why?
Largely, it’s because the stock market is a barometer of what investors think will happen in the future, rather than an assessment of the present day, according to economists and market analysts.
Investors are essentially shrugging off the Middle East conflict as a blip that will be resolved relatively quickly, they said.
“The stock market isn’t trying to price what’s happening today,” said Joe Seydl, a senior markets economist at J.P. Morgan Private Bank. “The stock market is always trying to price what the world is going to look like six to 12 months from now.”
Why stocks have been ‘resilient’
The S&P 500, a U.S. stock index, fell about 8% in the initial weeks of the Iran war, from the start of the conflict on Feb. 28 to a recent low on March 30.
But stocks have rebounded since then, erasing all losses since the beginning of the war. The S&P 500 closed at an all-time high on Thursday — about 11% higher than its nadir at the end of March. That followed a record close on Wednesday.
“The market has remained very resilient in the face of the war and has rallied strongly on the prospect that it will be resolved,” said Mark Zandi, chief economist at Moody’s.
A ship waits to pass through the Strait of Hormuz following the two-week temporary ceasefire between the US and Iran, which is conditional on the opening of the strait, in Oman on April 8, 2026.
Shady Alassar | Anadolu | Getty Images
And while investors cheered the possibility of a diplomatic off-ramp to the conflict, the temporary ceasefire has appeared tenuous, with the U.S. and Iran each accusing the other of breaking the agreement.
Nations haven’t been able to reach a peace deal ahead of the ceasefire’s end. Vice President JD Vance said U.S. officials left peace talks in Pakistan over the weekend after the Iranian delegation refused to agree to American demands not to develop a nuclear weapon.
The markets ‘have memory’
Ultimately, the stock market is signaling a collective belief that tensions will ratchet down, the war will end in the near term and oil flows through the Strait of Hormuz will normalize, economists said.
That’s largely because investors have been conditioned to believe that President Donald Trump will back off if the economic pain becomes too intense, economists said — the so-called “TACO” trade, shorthand for “Trump always chickens out.”
“Investors strongly believe — and have been conditioned to believe — he’s going to stand down, find a way to pivot, declare victory and move on,” Zandi said.
Trump has pushed back on the notion of backing down, framing his brinkmanship as a savvy negotiating tactic.
Economists pointed to a recent example of this dynamic: in April 2025 during so-called liberation day, when the Trump administration levied a host of tariffs on U.S. trading partners.
Within days — after the stock market had cratered more than 12% — Trump announced a 90-day pause on those tariffs. Stocks then saw one of their biggest daily rallies in history following Trump’s reversal.
Investors remember that Trump often de-escalates geopolitical shocks — which is why they’ve seized on positive headlines that hint at progress in peace talks, for example, Seydl said.
“The markets have memory,” Seydl said.
AI stocks and the ‘tech boom’
Traders celebrating at the New York Stock Exchange on April 15, 2026, as the S&P 500 closed above the 7,000 level for the first time.
NYSE
There are other factors underpinning market resilience during wartime, economists said.
One is the investors’ enthusiasm for artificial intelligence and technology stocks, which account for almost half of the S&P 500’s market capitalization, Zandi said.
“Those stocks run on their own dynamic independent of anything, including the war in Iran,” Zandi said. “I think we would have been down a lot more and it would have been harder for us to recover had it not been for the very, very optimistic perspectives on AI.”
We’re in the middle of a “tech boom” — and investors are likely to remain optimistic until they think the tech cycle has run its course, Seydl said.
More broadly, stock investors are essentially making a bet on the future earnings growth of a company — and the earnings backdrop has been “pretty solid,” Seydl said.
Consumer spending appears to be stable, for example, economists said. And companies are getting a boost to their after-tax earnings from the GOP’s so-called “big beautiful bill,” which, among other things, made it easier to write off investments upfront and therefore reduce their tax liability, Zandi said.
Going forward
Experts said there will be an economic hit from the Iran war, though.
“Despite the recent news of a temporary ceasefire, some damage is already done, and the downside risks remain elevated,” Pierre-Olivier Gourinchas, director of research at the International Monetary Fund, wrote Tuesday.
A protracted conflict risks deep and global economic pain, he wrote.
Even if the conflict is short-lived — as the broad market expects — stocks are unlikely to march much higher until it’s clear the U.S. is on the other side of the war and its economic fallout, Zandi said.
If investors are incorrect, and President Trump doesn’t back down or quickly extricate the U.S. from the war, the stock market may see a “full-blown correction” or worse, Zandi said. A stock market correction is a decline of at least 10% from recent highs.
“Everyone thinks they know what the script is,” Zandi said. “Now they just need to follow the script. If they don’t, the market will have some real problems.”
The uncertainty provides yet another example of why the average investor with a long time horizon should stick to their investment plan and ignore the noise, experts said.
“Trying to time the market is very difficult if not impossible for the average investor,” Seydl said. “It’s better to take a long-term perspective and ride out bouts of volatility.”
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