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How to mitigate rising auto and homeowners insurance costs

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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.

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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

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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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Disability advocates sue Social Security and DOGE to stop service cuts

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A Social Security Administration (SSA) office in Washington, DC, March 26, 2025. 

Saul Loeb | Afp | Getty Images

A group of disability advocates filed a federal lawsuit against the Social Security Administration and the so-called Department of Government Efficiency on Wednesday aimed at stopping cuts to the agency’s services.

Recent changes at the Social Security Administration under DOGE — including staff reductions, the elimination of certain offices and new requirements to seek in-person services — have made it more difficult for individuals with disabilities and older adults to access benefits, the lawsuit argues.

The complaint was filed in the U.S. District Court for the District of Columbia.

The plaintiffs include the National Federation of the Blind, the American Association of People with Disabilities, Deaf Equality, the National Committee to Preserve Social Security and Medicare, the Massachusetts Senior Action Council and individual beneficiaries.

“The defendants’ actions are an unprecedented and unconstitutional assault on Social Security benefits, concealed beneath the hollow pretense of bureaucratic ‘reform,'” the complaint states.

In nine weeks, the new administration has “upended” the agency with “sweeping and destabilizing policy changes,” the plaintiffs claim, that have shifted agency functions to local offices while slashing telephone services.

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“The result is a systematic dismantling of SSA’s core functions, leaving millions of beneficiaries without the essential benefits they are legally entitled to,” the lawsuit complaint states.

The “mass restructuring” of the agency is unlawful and violates the Rehabilitation Act and the Administrative Procedure Act, the lawsuit argues. The changes also violate multiple constitutional provisions, including the First Amendment right to petition the government for redress of grievances, according to the plaintiffs.

With 1.1 million disability claims pending, the recent actions could also be life threatening to individuals who are dying or going bankrupt while waiting for decisions, they allege.

The Social Security Administration did not respond to CNBC’s request for comment.

“President Trump has made it clear he is committed to making the federal government more efficient,” White House spokesperson Liz Huston said in an email statement. “He has the authority to manage agency restructuring and workforce reductions, and the administration’s actions are fully compliant with the law.”

Lawsuit alleges reform is ‘administrative vandalism’

People hold signs during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025. 

Nathan Layne | Reuters

The Social Security Administration sends monthly checks to around 73 million Social Security and Supplemental Security Income beneficiaries.

DOGE, which is not an official government entity, has been tasked with cutting “waste, fraud and abuse” within the federal government. President Donald Trump issued an executive order creating DOGE on Jan. 20, the same day he was inaugurated.

Since then, the Social Security Administration has cut 7,000 employee positions and closed the Office of Civil Rights and Equal Opportunity and the Office of Transformation. The Office of Civil Rights and Equal Opportunity handled the agency’s equal employment opportunity and civil rights programs. The Office of Transformation was responsible for coordinating customer service-related initiatives like adding the ability to use digital signatures and electronic documents.

The Social Security Administration has also changed its identity proofing policies for claiming benefits and changing direct deposit information that is expected to require more individuals to visit the agency’s offices in person.

The agency has updated its policy, allowing individuals applying for Social Security Disability Insurance, Medicare, or Supplemental Security Income who cannot use a personal my Social Security account to complete their claim entirely over the telephone, starting April 14. 

The reforms amount to the dismantling of “core functions of SSA, abandoning millions of Americans to poverty and indignity,” according to the plaintiffs’ complaint.

“What the defendants frame as ‘reform’ is, in truth, administrative vandalism,” the lawsuit states.

Beneficiaries face long waits, overpayment issues

The plaintiffs include seven individuals whose experiences, including long customer service waits and, in some cases, demands to repay large sums to the Social Security Administration, are detailed in the complaint.

One plaintiff, Treva Olivero, who has been legally blind since birth, was informed in March 2024 that she had been overpaid Social Security disability insurance benefits for five or six years, prompting the agency to demand she repay more than $100,000, according to the complaint.

Olivero’s Medicaid coverage was also terminated soon after, which left her without income and health coverage. She has since been in an “ongoing struggle” to have her disability benefits reinstated, while also facing almost $80,000 in medical debt, according to the complaint.

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Another plaintiff, Merry Schoch, who received Social Security disability insurance for many years, returned to work to help pay for large medical bills after she was hit by a waste management truck in 2022. She reported her income to the Social Security Administration, and the agency made no changes to her benefit payments, according to the complaint.

Two years later, Schoch stopped working and reported her unemployment to the Social Security Administration. In August 2024, the agency then terminated her benefits and informed Schoch that she owed $30,000 for the disability benefit payments she received while working full time, according to the complaint.

Last September, Schoch was informed she could reapply for benefits. However, she has since struggled to get in touch with the agency over the phone, online and in person. 

Both Olivero and Schoch are members of the National Federation of the Blind, which is also a plaintiff.

The plaintiffs want the court to reverse the Social Security Administration’s recent reforms, including staff reductions, closures of certain offices and policies requiring in-person appointments.

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Amid trade turmoil, ‘you do not want to time the market’

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Pres. Trump unveils sweeping tariffs: Here's what to know

As President Donald Trump rolls out sweeping new tariffs on goods imported into the United States, Americans are growing increasingly pessimistic about their financial fate.

Consumers worry that the duties will cause inflation to flare up again, while investors fear that higher prices will mean lower profits and more pain for the battered stock market

As of Thursday morning, futures tied to the Dow Jones Industrial Average were down 1,200 points, or 2.8%. S&P 500 futures sank 3.4%, and Nasdaq-100 futures lost 4%.

But sharp drops — or sudden spikes — in the market are to be expected, according to Jean Chatzky, CEO of HerMoney.com and host of the podcast HerMoney with Jean Chatzky.

“With these volatile markets, you do not want to time the market,” she said of the old adage. “Timing the market doesn’t work — it’s time in the market.”

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Trade tensions, inflation and concerns about a possible recession have undermined consumer confidence across the board, several studies show.

Still, it’s normal for most Americans to feel unnerved during heightened volatility, Chatzky said.

“There’s very little doubt that consumers are feeling nervous, maybe more nervous than we’ve felt in quite some time,” she said.

Committing to setting money aside in a high-yield savings account, whether by scaling back on dining out or rideshare expenses, will help regain some financial control, Chatzky said.

Top-yielding online savings accounts currently pay 4.4%, on average, well beyond the savings account rates at some of the largest retail banks, which average just 0.41%.

“Taking action is the best way to feel more resilient,” she said.

It’s understandable why some may be hesitant to continue investing, however, when you are investing for the long term, a down market is an opportunity for dollar-cost averaging, which helps smooth out price fluctuations in the market, Chatzky said.

This is also a good time to check your investments to make sure you are still allocated properly and rebalance as needed, so you are not taking on more risk that you are comfortable with, she added.

Timing the market is a losing bet

Talk yourself down from making any sudden financial moves, Chatzky advised.

Trying to time the market is almost always a bad idea, other financial experts also say. That’s because it’s impossible to know when good and bad days will happen.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.

And, although stocks go up and down, the S&P 500 index has an average annualized return of around 10% over the past few decades.

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How to file for a free tax extension if you can’t make April 15 deadline

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Galina Zhigalova | Moment | Getty Images

If you can’t file your taxes by the April 15 deadline, there’s a free, easy way to submit a federal tax extension online, experts say.  

Nearly 1 in 3 American admit that they procrastinate when it comes filing their taxes, according to a January survey of more than 1,000 U.S. filers from IPX1031, an investment property exchange service. In addition, about 25% do not feel prepared to file their taxes, the survey found.

As of March 21, the IRS received roughly 80 million individual returns of the 140 million expected this filing season, the agency’s latest reporting shows.

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Many natural disaster victims have an automatic tax extension, which varies by jurisdiction. Military members serving in a combat zone also have more time to file. 

However, the federal tax deadline for the majority of taxpayers is April 15. It’s possible to push that due date to Oct. 15 by filing for an extension.

But “it’s an extension to file, not an extension to pay,” said Jo Anna Fellon, managing director at financial services firm CBIZ.

“It’s an extension to file, not an extension to pay.”

After the tax deadline, you will start incurring the failure-to-pay penalty of 0.5% of your unpaid taxes for each month or partial month that your taxes remain unpaid. The failure-to-pay penalty has a maximum charge of 25% of your unpaid taxes.

That’s cheaper than the failure-to-file penalty, which applies when you don’t submit your return by the deadline. The failure-to-file penalty is 5% of unpaid taxes monthly, also limited to 25%.

But you’ll also owe interest on your unpaid balance, which is currently 7% and accrues daily after April 15.

You can estimate your taxes owed by creating a “pro forma return” — or mock version of your filing — using as many tax forms as possible, Fellon said.

The ‘easiest way’ to file an extension

There are a few free options to file a tax extension.

For federal taxes, you can complete Form 4868 and mail it to the IRS. But it’s better to file digitally to avoid processing delays amid the agency’s shrinking workforce, experts say. Paper filing can also increase fraud risk, they say.

The “easiest way” is by choosing “extension” when making a payment for 2024, which automatically submits Form 4868, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“It takes all of five minutes,” and you can double-check the transaction via your IRS online account, he said.

IRS Direct Pay

Internal Revenue Service

Alternatively, you can file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies.   

For the 2025 season, you can use IRS Free File for returns if your adjusted gross income, or AGI, was $84,000 or less in 2024. But there’s no income limit to file an extension, Lucas said.

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