“What I’ve heard most is grumbling about home and auto insurance rates,” said J.J. Montanaro, a certified financial planner with USAA’s military advocacy group.

Insurance costs overall can eat up 5% to 10% of the average consumer’s spending each year, according to Bankrate.com. But there are ways to trim the costs of vehicle, home and other insurance in 2024, even as inflation affects those prices across the board.

According to the Bureau of Labor Statistics, as of April, the cost of motor vehicle insurance had risen by 22.6% in the past 12 months. That’s on top of a 15.5% spike from April 2022 to April 2023, reflecting a rise in vehicle prices and repair costs. Rates, which vary by area, can also be affected by increases in crime, like vehicle thefts.

Vehicle insurance rates are likely to keep rising in 2024, according to Bankrate.com, which notes that, on average, Americans spend about 3% of their income on car insurance.

Those rates depend on many factors, like location. Military members often find that the cost of their vehicle insurance changes when they move to a new duty station, in part because states have different requirements for minimum amounts of coverage.

Other factors include the driver’s age, how much they drive, their driving record and credit history. Model and make also make a difference, so researching how much it might cost to insure a particular vehicle is a good idea before settling on your next ride.

According to the National Association of Insurance Commissioners, electric vehicles cost, on average, about $44 per month more than gas-powered vehicles to insure. USAA spokesperson Andrew Femath notes that EVs usually have components that are more expensive to repair and replace than gas-powered vehicles.

“This is primarily because of the car’s battery pack, which can cost $5,000 to $15,000 to replace, and even a small fender-bender can cause irreparable damage to an EV’s battery,” he said.

But there’s no guarantee that you’ll pay more for insurance when you switch to an EV, Femath said. Some drivers find that their insurance costs don’t change at all, or even decrease, he said.

“Given the rising popularity of EVs, car manufacturers are investing more in improving the technology and are driving down the cost to manufacture them,” he said. “As the number of hybrid and EV drivers increases, it’s likely that vehicle repairs will become easier and less expensive, which may ultimately lower auto insurance rates.”

Drivers may consider signing up for auto insurance programs that offer reduced costs based on how often — and how well — someone drives.

Usage-based insurance tracks mileage and driving behaviors while the person is at the wheel. For instance, members insured through one of USAA’s programs, Safe Pilot, can save up to 30% on their car insurance premiums.

A usage-based plan may be a good fit for people who work from home and don’t drive as much, or for deployed troops whose vehicle won’t be driven while they’re gone.

“My take is, we’re going to save some decent money in terms of our premium, and I think I’m a better, safer driver because now it’s a competition,” said USAA’s Montanaro, who saved 17% on his insurance in the first six months on Safe Pilot. “I’m not going to pick up my phone while I’m driving, and I’m more careful.”

Taking advantage of usage-based and behavior-based programs “is a pretty easy place to start” when looking to save money on premiums, Montanaro said.

But these programs have raised privacy concerns among consumers. As a result, some states have enacted legislation requiring companies to disclose the tracking practices and devices used to collect information on people’s driving habits, according to the National Association of Insurance Commissioners. Some insurers limit the data they collect.

Here’s what else to know about buying car insurance:

• Ensure you have enough insurance to cover any damage to or loss of your vehicle.
• Comparison shop between insurance companies, and always ask if a military discount is available.
• Insurers generally offer discounts for safety features, so check to see if you’re receiving credit for assets like air bags and daytime running lights.
• One way to save on premiums is to raise your deductible — as long as you can afford it. For example, you might raise your vehicle collision deductible from $250 to $500. That means if you’re in an accident that causes $6,000 worth of damage to your car, you’d pay $500, and the insurance company would pay $5,500. While you’d pay more for vehicle repairs or replacement, your monthly cost would decrease.
• If your car is older and has greatly depreciated, consider dropping collision and comprehensive coverage to carry only liability coverage. According to the Insurance Information Institute, if a car is worth less than $1,000, or less than 10 times the insurance premium, it might not be cost-effective to buy additional protection.
• Check your insurance policy carefully for things you may no longer need, but be careful. “Make sure you’re running through the ‘what if’ scenarios as you make these changes so that you’re not leaving yourself vulnerable,” Montanaro said.
• Consider bundling different types of policies. By buying your auto, homeowners or renters insurance from the same company, you might be able to save on the overall cost.

For more Insurance Guide coverage:

• Homeowners and renters insurance
• Life insurance

For example, in 2018, Navy Mutual members bought more than $412,000 in term life insurance, on average; while whole life insurance policies averaged nearly $81,400. That’s increased to $528,181 for term insurance policies and $120,183 for whole life policies in 2024, said retired Rear Adm. Brian Luther, president and CEO of Navy Mutual, a nonprofit organization that sells life insurance to the military community.

Term life insurance policies, which provide coverage for a specific period of time, are generally much less expensive than whole life policies, which can last until someone dies.

But military customers have bucked one trend among the general population, Luther said.

“Larger companies are seeing a lot of people, no longer scared about COVID, surrendering their policy. … We’re not seeing that,” Luther said.

More than 99% of Navy Mutual policyholders keep their policies, he said.

“Our mission is to take care of our members and their families,” Luther said. “For us, it’s a mission fail if you sell a person a policy and they come back later and say they can’t afford it.”

Navy Mutual and other insurers also benefit from the financial education programs provided across the Defense Department, Luther said.

“Every service member is briefed on the benefit of Servicemembers Group Life Insurance (SGLI),” he said. “They educate the military member on the benefit of having life insurance that will take care of your family.”

Navy Mutual and other organizations provide extra life insurance on top of the government’s SGLI coverage, which increased by $100,000 in 2023 to a maximum of $500,000.

Troops pay a premium of $31 per month for $500,000 worth of SGLI coverage, which is deducted from their pay. The monthly SGLI premium is the same regardless of the service member’s age or other factors. The rate hasn’t changed, at 6 cents per $1,000 of insurance.

Some troops determine they need more insurance to cover the specific needs of their family, especially those with children. Adding a second policy can have other benefits: SGLI coverage ends when troops leave the military, and it’s less expensive to buy life insurance at a younger age from organizations outside the military and lock in those rates.

SGLI is widely recognized as a strong benefit at a reasonable cost for service members. It can be converted to the Veterans’ Group Life Insurance program within a year and 120 days after the service member leaves the military. The VGLI maximum was also increased to $500,000 in 2023.

VGLI is more expensive than many other insurance programs. Yet it’s important to remember that everyone leaving the military with SGLI coverage qualifies for VGLI, regardless of health. If you sign up for VGLI within 240 days of separation, you don’t need to prove you’re in good health to hold it.

Premiums for VGLI increase every five years. For those who are 29 and younger, the monthly premium is $35 for $500,000 of coverage. By age 60, that monthly premium increases to $495. By age 70, it’s $1,130 a month.

“VGLI will insure you if you’re uninsurable, and that’s what you’re paying for,” Luther said.

Retired Army Brig. Gen. Mike Meese, president of AAFMAA, a nonprofit that sells life insurance to the military community, added that troops in “fair or better health” should try to find life insurance through another program before they leave the military to avoid VGLI’s higher cost.

People are paying more attention to life insurance coverage for their spouses, too, Meese said. The government’s Family SGLI program that offers coverage for military spouses has remained at a maximum of $100,000.

During COVID, with more people working from home and children learning remotely, people realized the value of spouse life insurance, Meese said.

“We’re seeing a lot more people getting $300,000 to $500,000 life insurance on their spouse, because it would be hard for anybody to continue to serve in the military if they lost their spouse and had young, school-age children,” Meese said.

Luther added that if spouses get life insurance through an employer, it’s generally a policy that ends when they leave that job.

Meese advises against having the “set it and forget it” mindset when it comes to life insurance. He notes that many people only buy life insurance once or twice in their lifetime, but “that might not be enough to keep up with your income growth, life changes, or the kind of inflation we’ve seen in recent years, and could leave military families insufficiently covered.”

He advises everyone to review their policies at least annually, as well as after any major life event that affects your ongoing finances, such as buying a home, adding a child or getting ready to leave the military.

Verify that your insurance provider and the military have your correct beneficiaries and next of kin on file to avoid confusion if you die unexpectedly, he said.

Life insurance calculators and professionals can help determine your needs for a policy. Financial counselors are available at military installations and through Military OneSource.

For more Insurance Guide coverage:

• Homeowners and renters insurance
• Car insurance
  

“What I’ve heard most is grumbling about home and auto insurance rates,” said J.J. Montanaro, a certified financial planner with USAA’s military advocacy group.

Most homeowners insurance policies have an inflation guard built in, but review your coverage annually to ensure there aren’t any gaps and make sure you’re getting the best price. Know what you would pay out of pocket in an emergency.

Wind and hail losses, particularly to roofs, have been on the rise. Those claims sometimes require a unique deductible, equal to a percentage of the home’s insured value.

Homeowners insurance policies don’t cover flooding.

Ensure you have enough insurance to cover any damage to or loss of your home and belongings. Comparison shop between insurance companies, and always ask if a military discount is available.

Renters in the local civilian community or in privatized military housing need renters insurance to cover the cost of their personal belongings in case of a fire or major weather event.

Renters insurance averages about $15 to $30 a month, according to the National Association of Insurance Commissioners.

Inventory your belongings, and if you have high-value items like jewelry or antiques, ask your insurance company about your best options for coverage.

Consider whether you want to cover the cash value of your belongings or the cost of replacing them. Actual cash-value coverage will reimburse you for the cost of the personal property at the time of the loss, minus depreciation and your deductible, but not for any replacements.