5 Reasons to Switch Your Car Insurance

1. You Want to Cut Costs

Inflation in the past couple years has done a number on consumer expenses, and car insurance has been no exception. According to January 2024 data from the Bureau of Labor Statistics, car insurance costs have gone up 20.6% since the same time in 2023.

There are many reasons car insurance has gotten more expensive, but one factor is that as car technology evolves and gets more expensive, vehicles become more expensive to insure. Additionally, labor shortages have made mechanics harder to find and translated into higher repair costs for insurers.

Because car insurance has risen across the board, you may not be able to lower your costs with another company significantly—but if you feel you're paying too much, it may be worth doing some comparison shopping and seeing if you can find a policy that still offers good coverage but at a lower price.

2. You're Moving

If you're moving to another state, you could find yourself in the position where you have to change insurance companies—if your insurer doesn't operate in your new state. Even if you stick with an insurer that offers policies in every state, you'll need to alert your insurer of the move.

Your policy and premium could change to reflect your new locale, potentially resulting in higher or lower prices. If you move to a city that has a lot of car thefts or accidents, for instance, you could see your rate rise. Likewise, if you move to a city that doesn't have as many issues, your rate will likely drop.

But whatever you do, don't cancel your policy and then move and plan on getting new car insurance after you move. Be sure to maintain your insurance without a lapse to protect yourself and ensure you're following insurance requirements.

3. You Want to Add a Child or Spouse to Your Policy

Life changes often mean making car insurance policy changes—for better or worse. For instance, if you just got married or moved in with your significant other, you'll probably want to have one insurance policy instead of two. It's generally considered more manageable and can be cheaper to be a couple on a policy rather than have two separate policies.

Or, if your teenager is now driving, you'll want to add them to your policy. Teenage drivers are famously expensive to insure, however, which is why you may find that your insurance is suddenly so expensive that you may need to at least look for other alternatives.

4. You're Unhappy With Your Current Insurer's Customer Service

If you've recently had trouble with a claim, or you've tried to contact your insurer to ask questions, and you're not getting the answers you're looking for, that's a valid reason to switch insurance providers.

Given that insurance mainly involves paying your premium once a month and rarely interacting with your insurance provider, if your insurer goes missing or falls short when you do need them, it may be time to look elsewhere.

If you are unsatisfied with your auto insurance company's customer service, you aren't alone. According to the J.D. Power 2023 U.S. Auto Insurance Study, satisfaction with auto insurance dropped 12 points (on a 1,000-point scale) in the past year—the largest decline in the past 20 years. Much of that dissatisfaction was due to prices and not necessarily other issues, however.

5. Your Driving Habits Have Changed

Maybe you're no longer commuting and now working remotely from home, or you've changed your driving habits in some other way, and you feel you deserve to be rewarded for that by paying less for your car insurance. First, give your current provider a heads-up on your changes, and they may reduce your premiums to reflect updated information, such as a reduction in miles driven. If you still aren't happy with what they're offering, you may want to investigate switching insurance companies.

How to Switch Insurance Companies

If you're ready to find a new auto insurer, here's how to go about it.

1. Start getting insurance quotes. The first step in your search for new insurance is finding out what other insurance companies offer. Need help finding those quotes? You may want to check out Experian's car insurance comparison tool. You can get quotes within minutes, and compare prices and policy details, such as the type of coverage and deductibles, to see if there's an insurer with a better offer than what you've got now.
2. Do your research. If you have found an insurer that looks better than what you have, get acquainted with the company's website or talk to an agent. Kick the proverbial tires. Pore over the policy's fine print and make sure the company offers the types of coverage you're looking for and at a good price. You may be in a rush to ditch your older insurer, but that doesn't mean you should rush into a new one either.
3. Make your first payment with your new insurance company. If you've made your decision, you can sign up with your new insurance and make that first payment.
4. Cancel your old insurance. Ideally, you don't want to pay for two insurance policies at once, but you definitely don't want to be in a situation where you cancel your old policy and your new one doesn't kick in for another week or two. So make sure you cancel your old policy but also have coverage until the new one starts. It should begin on, or before, the day your old policy ends. If you end up having prepaid for some of your insurance, your insurer may refund the rest of your money, minus, perhaps, a cancellation fee. It also may be prudent to ask for confirmation that your old policy has been canceled and won't be automatically renewed.

The Bottom Line

Other than paying your premiums every month, or wondering what's going to happen now that you've been pulled over for speeding, you probably don't think about car insurance all that much. And that's OK, if you're happy with your insurance. But if you've been paying high prices or receiving poor service, it's a good idea to check out what the competition is offering. By taking a little time to see what's out there, you could end up saving money and getting better service.