Smart Strategies For Shopping Auto Insurance

Auto insurance is a significant expense for drivers, and it's important to ensure you're getting the best deal. It is recommended to shop for auto insurance at least once a year to get the best coverage for the lowest price. This is because insurance companies regularly adjust their prices, and rates can change based on various factors such as your driving record, location, and vehicle. Shopping around for auto insurance can help you save money, improve your understanding of auto insurance, and reduce the cost of insuring teen drivers. It is also a good idea to shop for auto insurance when a life event occurs, such as moving to a new area, insuring a new family member, purchasing a new vehicle, or experiencing a personal or financial shift.

How often should you shop for car insurance?

It is recommended that you shop around for car insurance at least once a year to ensure you are getting the best rate for your coverage. This is because insurance companies regularly adjust their prices, and by shopping around, you can save money and improve your understanding of auto insurance.

However, there is no set timeline for how often to shop for car insurance, and you can switch companies whenever you want. Some people choose to shop around at the time of their policy renewal, which is typically every six to twelve months.

There are also certain circumstances in which it is beneficial to re-evaluate your coverage and shop for a new policy sooner. These include:

• When your rates are increasing
• When you are moving to a new area, either to a new state or a new ZIP code within your state
• When you are insuring a new family member on your policy, such as a spouse or a teen driver
• When you have purchased a new vehicle
• When you have experienced a personal or financial shift, such as a change in your driving record, location, or vehicle

By shopping for car insurance at least once a year and after any significant life changes, you can ensure that you are getting the best coverage for the lowest price.

When to shop for car insurance

It is recommended to review and compare car insurance rates at least once a year, especially when your policy is up for renewal. This is because insurance companies regularly adjust their prices and criteria, which can help you qualify for cheaper rates or better coverage. However, if you wait for the renewal date, you may miss out on a better deal.

When your circumstances change

Life changes can also be a good prompt to shop around for car insurance. For example, if you:

• Move to a new state or ZIP code
• Get married or add a new driver to your policy
• Purchase a new vehicle
• Experience a personal or financial shift, such as a change in credit score, job or retirement
• Are involved in an accident or receive a ticket

Benefits of shopping for car insurance

Shopping for car insurance can be a tedious task, but it comes with several benefits. Here are some reasons why it is beneficial to shop around for car insurance:

Saving Money:

One of the main advantages of shopping for car insurance is the potential for significant financial savings. By comparing quotes from different insurance providers, you can find the most affordable option for the coverage you need. Insurance premiums can vary widely between companies, and shopping around allows you to take advantage of competitive rates. Additionally, insurance companies offer various discounts, and by exploring your options, you may discover that you are eligible for discounts with a different insurer.

Finding Better Coverage:

Shopping for car insurance allows you to explore and compare the coverage options offered by different insurance providers. You may find that another company offers more comprehensive coverage for a similar or lower price. For example, some insurers provide new car replacement coverage for a longer period or include additional benefits like roadside assistance or ridesharing coverage. By shopping around, you can ensure that you get the best value for your money and that your insurance policy meets your specific needs.

Convenience and Peace of Mind:

Shopping for car insurance can also lead to greater convenience and peace of mind. You may find an insurance company that offers more efficient and helpful interactions, enhancing your overall experience. Additionally, you can explore the claims process and support provided by different insurers. In the event of an accident, having a supportive insurance company that efficiently manages the claims process can significantly reduce your stress and provide guidance during a challenging time.

Taking Advantage of Competition:

The insurance market is highly competitive, and shopping around allows you to benefit from this competition. Insurance companies want your business, and by comparing their offerings, you can find the one that best meets your needs and budget. You can also leverage the flexibility to switch insurance carriers at any time, not just during policy renewals. This empowers you to make informed decisions and negotiate better terms.

Personalised Coverage:

Shopping for car insurance allows you to tailor your coverage to your unique circumstances. For instance, if you have a new family member moving in or have purchased a new vehicle, shopping for insurance can help you find a policy that accounts for these changes. You can also adjust your coverage as your vehicle ages, ensuring that you have the right level of protection without overpaying.

In conclusion, shopping for car insurance is a valuable exercise that can result in significant savings, improved coverage, and greater peace of mind. It empowers you to make informed choices, take advantage of competitive rates, and find an insurance provider that best suits your needs and budget.

Tips for shopping for auto insurance

Shop around for quotes

Shopping around for auto insurance coverage on an annual basis and re-evaluating your policy could result in lower insurance premiums. You can easily shop around for auto insurance and explore multiple auto insurers' offerings by using an online quote comparison tool.

Compare quotes from at least three insurers

Before buying a policy, make sure to compare quotes from at least three insurers. That way, you increase your chances of getting the coverage you need at a better price. If you aren’t satisfied with your quotes, you can always gather more.

Check your credit history

If you live in a state that allows credit-based insurance scores as a factor for setting car insurance rates, check your credit reports before you shop to get a general idea of where your credit is at. Then dispute any errors to help make sure your information accurately reflects your credit.

Research potential insurers

Take time to research the many auto insurance companies on the market. Check out their reviews and services, along with the discounts they offer drivers. Don’t skip over smaller insurers, as they sometimes have the biggest discounts or the best deals for drivers in their area.

Have the necessary information on hand

When requesting a quote through an online tool, you’ll be asked for specific information to determine your premium, including personal information, vehicle details, past insurance history, your driving record and more. Be sure to gather important documents and information ahead of time to simplify the quotes process.

Be wary of extremely low quotes

According to Steve Ellis, an assistant vice president and claims field manager in the insurance industry, “Be wary of extremely low quoted premiums. If one quote comes in extremely low, ask clarifying questions to ensure you are comparing apples to apples.”.

Double-check that your coverage meets your needs

Ellis also points out that it's important to properly insure your vehicle for any modifications, like lift kits or custom sound equipment, to help ensure you are properly financially protected.

Consider working with an independent insurance agency

Working with an independent insurance agency could be a good idea if you feel especially nervous about shopping. These agencies contract with several auto insurers and shop your policy for you. Licensed agents will also be able to listen to your specific scenario and help you craft a policy that fits your needs, including your budget.

How to shop for auto insurance

Shopping for auto insurance can be a daunting task, but it can help you save money. Here is a step-by-step guide on how to shop for auto insurance:

Step 1: Gather Information

First, gather all the information you need to get a quote. This includes personal information such as your name, birth date, address, and how long you have lived there. You will also need vehicle details like the Vehicle Identification Number (VIN), make, model, year, mileage, and safety features. Additionally, you will need to provide your driving history, including any tickets or accidents, and your current insurance information.

Step 2: Decide on Coverage

Next, figure out the type and amount of coverage you need. All states require a basic level of bodily injury and property damage liability coverage that compensates other drivers when you are at fault in an accident. You may want to increase your liability coverage amounts to avoid being underinsured. There are several other types of coverage to consider, including collision insurance, comprehensive insurance, underinsured/uninsured motorist coverage, medical payments coverage, and personal injury protection. If you have an auto loan, your lender will likely require full-coverage insurance, which includes liability, comprehensive, and collision coverage. You may also want to consider gap insurance if you owe more than your car is worth.

Step 3: Choose How to Get a Quote

There are multiple ways to get car insurance quotes, each with its pros and cons. You can contact an insurance company's agent, use an insurance broker or independent agent, get a quote from a company's website, or use an online comparison tool. Captive agents work for a single company and can ensure you get all applicable discounts, but it is slower to compare companies this way. Brokers and independent agents can help you compare multiple options but may push for more coverage than you need. Company websites offer instant quotes and discounts but may not cover all situations. Online comparison tools save time and provide quotes from multiple companies but may not offer extra help.

Step 4: Compare Quotes

Once you have decided on a method, compare car insurance quotes from different companies. Look for the right discounts and consider usage-based insurance programs that reward good driving habits. Compare the premiums, which are the total costs per payment cycle, and choose the policy that best satisfies your needs and budget.

Step 5: Purchase a Policy

Finally, purchase your chosen policy. Overlap your old and new policies by at least a day to avoid a lapse in coverage, which can increase your premiums.

Frequently asked questions