While it may seem like a hassle to shop around, regularly reviewing your auto insurance could uncover savings or better options. But how often should you compare? What factors might signal it's time for a switch? And are there times when switching may not be the best idea? Let's dive in.
With the cost of vehicles on the rise, shopping around for auto insurance is a great way to find savings that can be applied to cover your monthly car payment, paying for your gas, or applied to something else entirely like a ski or surf rack. In fact, Polly customers save an average of $900 per year on their auto insurance* – that's money that could go directly toward your vehicle expenses or other priorities.
How Often Should You Compare Auto Insurance?
Many experts recommend comparing rates every six to twelve months. Rates can fluctuate due to market trends, personal driving history, or even new insurance companies entering your region. By comparing quotes regularly, you stay informed and ensure your current provider is still offering a competitive rate.
At the very least, consider reviewing your policy at key life milestones or major events, such as purchasing a new vehicle, moving to a different location, or changes in your household.
Factors That May Prompt a Policy Review
Certain life events or changes in your circumstances may warrant a closer look at your auto insurance policy. These factors include:
- Accidents or Claims: If you’ve had an accident or filed a claim, your rates may go up. Shopping around after an incident could help you find a better deal elsewhere.
- Adding or Removing a Driver: Whether you're adding a new teenage driver or removing an adult child from your policy, this can dramatically affect your rates. It’s a good time to compare options.
- Buying a New Vehicle: Newer cars often come with better safety features, which may qualify you for discounts. Don’t assume your current insurer will offer the best deal automatically.
- Moving: Your location plays a big role in determining your insurance premium. If you’ve moved to a different state, city, or even a new neighborhood, your rates could change dramatically.
- Changes in Credit Score: In many states, insurers use your credit score as a factor when setting rates. An improvement in your credit score could result in better offers.
- Policy Renewal Notices: Insurers often raise rates at renewal time. When you receive your renewal notice, it's a great time to compare your current policy to what competitors are offering.
When Is a Bad Time to Switch Auto Insurance?
While shopping for insurance can be beneficial, there are times when switching may not be in your best interest:
- Mid-Claim: If you’re in the middle of a claim, switching policies can complicate things. It’s usually best to wait until your claim is settled before considering a switch.
- Penalty Fees: Some insurers charge cancellation fees if you terminate your policy before the end of the term. Be sure to check for any penalties before switching, as these could negate any potential savings.
- Losing Discounts: If you've been with the same insurance company for a long time, you might be benefiting from loyalty discounts or bundling deals (such as combining auto and home insurance). Weigh the value of these benefits against any new offers to ensure you’re not losing out.
When Is the Best Time to Switch Auto Insurance?
Switching insurance doesn’t always require a major life event, but some moments present an ideal time to make the move:
- When Your Rates Increase: If you notice your premium going up without any clear reason, this is a signal to start comparing rates.
- After Improving Your Driving Record: If points have recently come off your driving record or you’ve stayed accident-free for a while, other insurers may offer better rates.
- New Offers from Competitors: Insurance companies often introduce new promotions or discounts to attract customers. Stay alert to these offers, which could lead to significant savings.
Switching auto insurance can be a smart financial move, but it’s important to time it right. Regularly comparing rates, especially when key factors in your life change, can ensure you’re not paying more than necessary. However, avoid switching mid-claim or if penalty fees outweigh the benefits of a new policy.
Auto Insurance Quotes From Leading Carriers
With Polly's network of over 40 leading carriers and track record of helping thousands of people switch and save, you can feel confident about finding competitive coverage that meets your needs. See how much you could save by getting your free quote with Polly today.
*National average annual savings by new customers surveyed who saved with Polly in 2023. Actual savings may vary.