Shopping for new auto insurance is smart, especially after a significant life change, like getting married, graduating from college or moving to another state.
The average premium varies from state to state due to state laws, traffic density, urbanization and miles driven per number of highway miles. Moving, or other life changes, can motivate shopping for insurance, but with the wide variety of auto insurance providers available, it can always pay to shop around.
- Auto insurance companies specialize in different risk areas, like insuring high-risk drivers, so it’s essential to shop around.
- Adding a teen driver to your policy can make your rates increase, but adding a spouse to your policy could result in your rates going down.
- After filing a claim or accident, it may be wise to stay with your insurance company until policy renewal approaches instead of shopping around.
When should you shop for car insurance?
Your premium can increase for different reasons, like adding a new driver or filing a claim. You don’t have to wait for an uptick in your premium to shop around, though. There are benefits that you may not be aware of, like getting a discount for paying your premium in full.
Auto insurance providers may also specialize in different areas, like insuring high-risk drivers or having better rates in specific regions of the country, so it can be advantageous to look around.
Learn more: When is the best time to shop for car insurance
Shop for car insurance at least once a year
It’s your prerogative to shop for car insurance whenever you want to, but comparing rates at least once a year may help you get the best price. Premiums can increase upon renewal, which occurs every six months or sometimes once a year. If you have gotten a ticket or made a claim in those six months, you could see your rates increase, which may prompt you to search for a cheaper alternative.
On the other hand, there may be things that have happened in the course of six months or a year that could result in a discount on your premium – like getting married or completing a degree – but you won’t know unless you call your provider to get an updated rate.
All in all, comparing rates regularly could benefit you more than you know.
Shop for new car insurance when you buy a car
You frequently get a better rate by staying with a company for a long time, but if you are buying a new car and your relationship with your auto insurer is still new, it may be worth it to shop around, according to Lauren Mckenzie, an insurance broker/agent with A Plus Insurance.
“Since insurance prices vary based on the vehicle and the insurance company, insurance may be cheaper with another company,” she said. “If you shop for insurance, I recommend finding a company that can bundle all your insurance products for additional savings.”
For example, you could have two older vehicles on your insurance policy, but you then trade them to purchase a newer car. When you take the two older vehicles off your insurance policy and add the newer vehicle to it, you lose the multi-vehicle discount you had on your policy. This could significantly increase the cost of your policy, she said.
Shop for a new policy when you add a driver
Adding a new driver to your policy can increase or decrease your rate, depending on the driver’s age and driving experience. Mckenzie said that adding a spouse to your policy can make your rate drop in some cases if your spouse has a clean driving record because of the married-driver discount.
However, having a driver with little or no driving experience can increase insurance prices. Adding a teen driver can be an excellent time to look for new auto insurance. Insurance companies recognize the increased risks that come with insuring teen drivers. The fatal crash rate for drivers ages 16-19 is about three times that for drivers ages 20 and older, according to the Centers for Disease Control and Prevention.
“Some insurance companies, like Progressive, specialize in high-risk drivers, meaning they offer cheaper insurance for younger drivers or drivers with violations on their record,” Mckenzie said. “Each company has their preference of what type of driver and vehicles they want to insure, so making a big change like adding a driver can increase the rates if you are with a company that does not specialize in insuring high-risk drivers if they have violations or as a newly-licensed driver.”
Shop for insurance after an accident or ticket
Mckenzie says if you get a ticket or are in an accident and make a claim, staying with your current auto insurance provider can be better until your policy is near renewal. Typically, your current auto insurance provider will not pull your driving record until the renewal, at which point your rates could increase due to the ticket or claim.
“If you switch to another insurance company, they will pull your driving record and the ticket will show up, impacting the rates right away versus at the end of your policy term,” she said. “At your renewal, if your rates have gone up due to the ticket, you may consider shopping around to see if another insurance provider may be cheaper with the ticket on your record.”
In addition to other factors, rates can vary based on where you live, your age, your education and your marital status. You can use a car insurance estimator to help you compare rates from different insurance providers by entering basic information like your age, ZIP code and vehicle owner status.
Shop when you move
When you move to another state, you must contact your insurance provider and tell them where you live. That’s because insurance policies are written to be state-specific and a policy that insures you in Texas will not cover you if you move to Colorado, Mckenzie says.
Another reason to notify your auto insurer is that the minimum insurance required in your previous state might not be the same as the minimum insurance required in your new state. You could then be driving with less coverage than you should have in the state where you now live. To be legally driving on the road, you must have the minimum insurance required in your new state, which your auto insurance provider can help you to obtain.
Mckenzie said, “If you have been insured with a company for a long time and you’ve recently moved to a new state, switching your car insurance policy to that new state, sometimes that insurance company that was cheap in your old state will now be much more expensive in the new state and vice versa.”
Furthermore, not all companies offer policies in each state, so your old insurer might not be an option in a different state.
If your rates increase because of your move, it can be an excellent time to shop for a new provider. Reasons for a premium increase with a move can include the number of accidents and claims reported in the area, the type of area it is, and the disposable income per capita.
Shop for a new policy when it no longer fits your budget
What happens if your policy increases, or your budget changes, and your existing policy becomes too expensive?
First, you can talk to your auto insurance provider to see if adjusting the coverages on your policy could lower your costs, especially if you have coverage that exceeds what others may have. Another is to inform your auto insurance provider about changes in your life, such as getting married, completing a driver-safety program or even entering the military to see if this leads to a discount you previously didn’t have. You also can shop around among providers to look for a better price.
“Keep in mind, all insurance companies are different as far as coverages they offer, prices, and the quality of service,” Mckenzie says. “Sometimes, a higher quality company may be a better fit, even if they are a little bit more expensive than a lower rated insurance company.”
Unlock valuable insights on how to choose the best car insurance company
Final thoughts: Shopping for car insurance
Life happens, and people move to a different state for a new job, to be near family, or to live in an ideal location. Teenagers get added to policies, and adults with good driving records still need to make a claim. But you don’t need a life change or premium increase to shop for better car insurance rates or added discounts.
When you shop around, see how the insurance providers you consider are rated for their financial strength through AM Best and J.D. Power for auto claims satisfaction.
You can also look at different surveys and lists to see the best car insurance company. No matter what, research before you buy a policy to ensure it fits your specific needs.
Check out our detailed guide on Is it cheaper to buy car insurance online or from an agent
Resources & Methodology
Sources
- Centers for Disease Control and Prevention. “Keep Teen Drivers Safe.” Accessed April 2023.
- Insurance Information Institute. Facts and Statistics: Auto Insurance. Accessed April 2023.
- J.D. Power. “ Auto Claims Satisfaction Study.” Accessed April 2023.
Methodology
Why you can trust CarInsurance.com
The CarInsurance.com editorial team bases its reporting on data it commissioned Quadrant Information Services to gather on average auto insurance rates for more than 34K ZIP codes across the United States. Typically, averages are based on rates for a single, 40-year-old male, with no violations who commutes 12 miles to work each day and has a full-coverage policy with limits of 100/300/100 and a $500 deductible for collision and comprehensive coverage.
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