Although the economy is slowly recovering from the recent surge of inflation and the financial woes inflicted by supply chain problems and the after-effects of the COVID-19 pandemic, money is still tight for many families and individuals across the United States. Many households are cutting expenses wherever they can, canceling services, and trimming their budgets.
Unfortunately, auto insurance is one of those things you just can’t do without if you’re a vehicle owner. Driving without insurance is not only illegal almost everywhere in the US, it’s also wildly dangerous — if you get in an accident, not only will you be financially responsible for the damage done to you and your vehicle, but also any medical and repair bills incurred on the other party. And that’s before the subject of liability comes up.
But the legal and financial necessity of auto insurance doesn’t mean you have to sit idly by. Every insurance company is different, and that not only means different policies and options but also different price points. It makes good financial sense to get in the habit of shopping around and looking for a better deal on auto insurance.
How often should you shop around?
Here’s a good rule of thumb: if you can’t remember the last time you shopped around and compared auto insurance quotes, it might be time to do so. You might also consider doing it every six months to a year. It’s also a good idea to shop around after a major life event or change in your financial circumstances, such as:
- Buying a new car or house
- Moving to a new location or state
- Life events such as marriage or divorce
- Changes in driving habits or circumstances
What influences car insurance rates?
You might be wondering why changes in life circumstances should prompt you to shop around for a different life insurance policy. The answer to that is simple: insurance companies stay in business by accurately assessing risk to life and limb. If something brings your risk of a claim up — for example, moving to a high-risk area or getting a violation on your driving record — then your premiums will go up accordingly.
But the reverse is also true. For example, getting married is often considered a sign of lower risk because drivers with spouses and families tend to be more careful. Similarly, drivers who have accumulated experience behind the wheel are also considered lower risk, which is why teen drivers pay so much for auto insurance and why rates slowly go down as you get older.
Tips for finding cheaper car insurance
Now that you’ve given some thought to when you should shop around for car insurance (and maybe even decided that the time is now), here are a few tips to help make it easier:
- Check out individual insurance websites. State Farm might offer entirely different rates than Allstate where you live, for example, and might offer more attractive policy details as well. You can also call or contact them for more information.
- An easier way to gather quotes is to use insurance comparison platforms such as The Zebra, which aggregate quotes from multiple insurers and take some care of some of the heavy lifting.
- You could also consider working with an independent broker or agent, who can do the more complex work on your behalf.
- When comparing quotes, be sure to include both national and local insurers: a smaller, localized insurance company might have services better suited to the realities of your area.
- Make sure to make apples-to-apples comparisons; that is, take care to compare policies with similar coverage values and limits. A cheaper policy won’t do you any good if it doesn’t cover you when you need it most.
- Carefully assess coverage vs. cost. You want to make sure you’re adequately covered, but you also don’t want to break the bank. This is where an independent broker or comparison website could make life easier for you.
- Take your unique circumstances into account. For instance, if you don’t drive very much, you could qualify for a low-mileage discount. The average insurance company has dozens of discounts available for everything from belonging to certain professions to veterans discounts and more.
- Finally, make sure to examine the fine print. Scrutinize a policy carefully before committing to it so you don’t overlook any exclusions, procedures, or other small but important details.
Other things to consider
Finally, take a moment to look over the reputation of the company you’re thinking about going with. Even national insurers can have different levels of customer satisfaction from state to state, so it pays to be cautious and look into consumer advocacy resources to spot red flags. If and when you do decide to sign a policy with a new insurer, be sure to specifically ask them about available discounts.