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Why You Should Shop for New Car Insurance Annually

As a consumer, loyalty often brings rewards. However, when it comes to auto insurance, sticking with the same provider year after year might not be the best financial decision. Insurance companies frequently adjust their rates, so it’s wise to shop around regularly to ensure you’re getting the best deal. Here’s why and when you should consider switching your car insurance provider.

Should You Look for New Insurance Every Year?

Auto insurance policies typically last six or twelve months, after which you’ll need to renew your coverage. In 2023, car insurance premiums increased by a staggering 20.3%, according to the Bureau of Labor Statistics. Despite the general rise in premiums, you might still save money by switching providers. Shopping around can be quick and could save you hundreds of dollars.

Experts recommend evaluating your auto coverage and shopping for better rates at least once a year. You should receive a renewal notice several weeks before your policy expires, detailing any changes, including your new premium. December is often a good time to compare rates, as many insurers set new rates for the upcoming year.

Life Changes That Could Prompt a Car Insurance Change

Besides an annual review, certain life events can also be a good time to shop for new car insurance:

• Getting married: Married couples often pay lower rates and may receive discounts for insuring multiple vehicles with the same company.
• Buying or renting a home: Bundling auto insurance with homeowners or renters insurance can lead to discounts.
• Change in employment: If you retire or start working from home, you may drive fewer miles, potentially lowering your rate.
• Reaching a certain age: Auto insurance rates generally decrease as you age, especially in your 20s and 50s.
• Buying a new car: Your vehicle model affects your rate, so a new car might offer savings.

How to Shop Around for Car Insurance

Whether due to a life event or an annual review, follow these steps to ensure you get the best rate:

Review Your Coverage

Before comparing quotes, review your current rate and coverage. Adjust your coverage options, levels, and deductibles based on your current situation and budget.

Use a Comparison Tool

Obtain quotes from at least three to five providers. Using a comparison tool can save time by providing personalized quotes from multiple insurers with a single form.

Look Beyond the Rates

Ensure you’re comparing policies with the same coverage. Consider different types of coverage and discounts that might affect your rate.

Choose a Provider

Decide whether to stay with your current insurer or switch to a new one. If you switch, align your new policy date with your cancellation date to avoid a lapse in coverage.

Improving Your Credit Can Help You Save on Auto Insurance

Your credit score can impact your auto insurance rates. In many states, insurers use a credit-based insurance score to calculate premiums. Check your credit score and report for free, and take steps to improve your credit if necessary to potentially lower your insurance costs.

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