How often should I shop for car insurance?

Smiling woman driving a car and wondering how often to shop for car insurance Smiling woman driving a car and wondering how often to shop for car insurance Image:

In a Nutshell

If you want to be sure you're getting the very best deal on car insurance, experts recommend shopping for a new rate every year. Here's why.

We generally make money when you get a product (like a credit card or loan) through our platform, but we don’t let that cloud our editorial opinions. Learn more about how we keep this compensation from affecting our editorial views.
Advertiser Disclosure
We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.   Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.   Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

To see if you’re getting the very best deal on car insurance for your situation, consider shopping for a new rate every year.

You don’t need to wait until you receive a renewal notice from your present carrier to begin shopping for a new policy.

The sooner you begin your search, the more time you’ll have to compare prices.

You can cancel your existing coverage before it expires, if you find a better policy. According to Allstate, if you do so, your insurance company will typically refund the unused portion of your premium, but they might charge you an administrative fee.

Why should I shop around for car insurance? 

Shopping is important because the car insurance industry is competitive — the carrier who gave you the best rate last year may not do so today. The only way you’ll know is to shop for new quotes.

Insurance companies regularly adjust their prices, says Bill Hebert, a spokesman for Mercury Insurance. “There’s a good chance you may find a more competitive rate.”

Nicole Farr, a spokeswoman for the Arizona Insurance Council, agrees. “We advise people to do an annual policy checkup, both with their home and auto coverage,” she says. “As different programs are developed, new discounts can pop up.”

Car insurance rates increased by an average of 2 to 3 percent throughout the U.S. in 2016,  according to a 2017 J.D. Power and Associates study.

The benefits of shopping for car insurance 

Even though you may not always find a better deal, shopping is the only way to be sure you’re not missing out on savings.

According to Experian, when you get insurance quotes, credit report inquiries from insurance companies won’t affect your credit history. They’re treated as a “soft inquiry,” like requests from you for a personal credit score.

Here are four benefits you may experience when shopping for auto insurance.

1. It could save you money.

The J.D. Power 2016 U.S. Insurance Shopping StudySM found that drivers who switched auto policies had an average premium of savings of $356 (a slight drop from $388 in 2015).

When you shop for car insurance, “you gain confidence that you’re getting good value for your insurance dollar,” says Kevin M. Lynch, an assistant professor of insurance at The American College in Bryn Mawr, Pennsylvania.

2. It helps ensure you’re not taken for granted.

In 2015, the Consumer Federation of America warned that policyholders who keep the same policy year after year are more likely to be charged higher rates than if they periodically changed carriers.

“It’s another reason to keep an eye on your policy, even if you think you’re happy with it,” Farr says.

3. It may improve your understanding of auto insurance.

Each time you shop for insurance, you’re improving your knowledge of the insurance industry and the coverages companies offer, says Kevin Foley, a New Jersey insurance agent. This can make it easier for you to spot opportunities to reduce costs.

For example, you may decide you can accept a higher auto insurance deductible, the amount you must pay out of pocket before your expenses begin to be paid under your policy’s terms.

A higher deductible typically will reduce your rates. The amount of savings varies widely depending on a variety of factors, including the make and model of your car. It’s important to try to choose a deductible you can afford to pay if you must file a claim.

4. It can reduce the cost of insuring teen drivers.

When you add a teen driver to a family policy, shopping becomes essential, since teens often cause auto insurance rates to soar, Farr says.

“Ask about the different types of discounts insurers will offer for a teen driver,” she adds.

For example, many insurers will reduce rates for teens if they agree to take a safe-driver training course, she says.

Tips for shopping for auto insurance

When shopping for car insurance, there are a few things you can do to improve your chances of finding a better policy.

Bottom line

Comparing auto policies can result in lower rates. However, make sure that if you purchase a new policy, you’re not sacrificing coverage to save some cash.

 

 


Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.