Switching car insurance providers may seem like an inconvenience, but depending on your situation, it could save you hundreds of dollars per year.
It's generally a good idea to shop around for car insurance once a year to ensure you're still getting the best deal. However, there are other instances where a new policy could make sense, even if your current one isn't up for renewal.
Here are eight reasons to switch car insurance.
- You want to save money
- You got married
- You're moving
- You want to add someone to your policy
- You're unhappy with your current insurer
- Your driving habits have changed
- You want to bundle policies
- Your credit has improved
When to Switch Car Insurance
Here are some situations where it could make sense to make the leap to a new car insurance policy.
You Want to Save Money
Car insurance premiums have increased dramatically in recent years, with one report from Insurify forecasting a 22% hike in 2024 alone. Some of the reasons for higher rates include a spike in vehicle prices, higher repair costs and a surge of distracted driving leading to more claims.
Not all insurers use the same processes to set their rates, however, so it's possible to find a better premium than what you're currently paying.
Learn more >> How to Save on Car Insurance
You Got Married
Life changes often mean making car insurance policy changes—for better or worse. For instance, if you just got married, 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.
Learn more >> Should I Buy Car Insurance With My Partner?
You're Moving
Insurance companies track claims by ZIP code, so even if you're just moving a few miles away, your premium may go up. That's especially true if you move to a city that has a lot of car thefts or accidents. Checking with other insurers after you move can be a good way to see if you can save.
It's also important to note that car insurance is regulated on the state level. So, if you're moving to another state, you may be forced to apply for new coverage, especially if your current carrier doesn't operate in the state where you're relocating.
Learn more >> Will My Car Insurance Go up if I Move?
You Want to Add Someone to Your Policy
If your teenager is now driving, you'll want to add them to your policy. Note, however, that teenage drivers are famously expensive to insure, so you may see a significant increase in your premiums. This can be a great time to research alternatives to minimize the financial impact.
If you're not yet married but you've moved in with your significant other, that's another great time to shop around and consolidate your separate policies into a single one. You may even be able to add a friend, as long as they share a permanent residence with you.
You're Unhappy With Your Current Insurer
Given that auto insurance mainly involves paying your premium once a month and rarely interacting with your provider, it may be time to look elsewhere if you have trouble with a claim or you're not getting the kind of customer service you believe you should.
If you are unsatisfied with your auto insurance company's customer service, you aren't alone. According to the J.D. Power 2024 U.S. Auto Insurance Study, more than half of customers say they have little trust in their insurers. Using that study and other online reviews for insurance providers in your area can give you a good idea of where to look.
Your Driving Habits Have Changed
If you're driving more or less than you were last year, reach out to your current insurance provider to update your mileage. For example, if you're working remotely now and no longer commuting to work, your provider may reduce your premiums.
However, if you still aren't happy with what they're offering, you may want to investigate switching insurance companies.
You Want to Bundle Policies
Many insurers offer discounts if you bundle multiple insurance policies, such as auto, home, renters, motorcycle, boat, RV and more.
Depending on where you look, however, the bundling discount—not to mention the cost of those other policies—can vary. So, if you're thinking about adding some coverage, take some time to shop around.
Learn more >> How to Bundle Insurance
Your Credit Has Improved
In most states, car insurance companies use a credit-based insurance score to help determine your premiums. However, it's unclear how often insurers review your score after the initial check when you buy your policy. So, if your credit has improved significantly since then, you may not see an immediate impact.
In other words, it can't hurt to look into other options to see if you can get some immediate savings for your efforts.
How to Switch Car Insurance
If you're ready to find a new auto insurer, here are some steps you can take to get started and ensure a smooth transition.
1. Start Getting Some Quotes
The first step in your search for new insurance is finding out what other insurance companies offer. If you need help, Experian's car insurance comparison feature can compare rates from top insurers and provide you with quotes within minutes.
You can then 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
While it may be tempting to just go with the cheapest option, it's important to kick the proverbial tires. Take some time to get acquainted with the company's website or talk to an agent.
Pore over the policy's fine print and make sure the company offers the types of coverage you're looking for at the right 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—just be sure to keep your existing policy in place while you hunt.
3. Complete the Purchase and Make Your First Payment
Once you've made your decision, you can sign up with your new insurance and make that first payment. Keep in mind some insurers provide a discount if you pay the policy premium in full rather than choosing a month-to-month option.
However, if your budget doesn't allow for a larger payment, you can opt for the cheaper option right now and build up your savings to make a full premium payment possible in the future.
4. Cancel Your Old Policy
Once your new policy is in force, you'll want to cancel the old one to avoid paying for two policies at the same time. Just make sure there's no lapse in coverage between the two. Otherwise, you'll be left without coverage for a time, and your new insurer could hike your rate.
When setting up the new policy, decide on an effective date for the new coverage. You can then use the same effective date to cancel your old coverage. If you're still in the middle of a policy period, your old insurer may refund the remainder of your unused, prepaid premium—though some may charge a cancellation fee.
Learn more >> How to Cancel Car Insurance
The Bottom Line
If you're happy with your current car insurance policy, you may rarely think about it. However, if you think your premiums are too high, the service is poor or one of the factors that affect car insurance rates has changed, 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.