Signing up for a great deal always feels good, but you can’t set it and forget it if you want to keep saving money on car insurance. Drivers of all stripes can miss out on big savings unless they regularly shop car insurance policies for the best deal.
Major changes in your life or driving situation — such as moving, getting married, and adding or removing a driver from your policy — can affect your car insurance premiums. Knowing which factors affect your rates will help you decide when to make changes to your policy, which is also a good time to shop auto insurance providers.
If you want to know when to shop for car insurance, just ask yourself if any of these situations describe the current changes in your life.
1. You’re Moving To a New ZIP Code
It’s no secret that insurers rely heavily on location to set premiums, and ZIP codes provide an easy template for them to do so.
How much can rates change across ZIP codes? In a study released in October 2018, the Consumer Federation of America found that, in each of the 10 major cities tested, at least one insurer’s rates were $200 more for the same coverage to two comparable drivers who lived in adjacent ZIP codes. This practice has been heavily criticized, with Michigan, for example, banning the usage of nondriving factors to set auto insurance rates.
So, what can you do if your state allows insurers to consider ZIP codes when setting rates? Not much, if you’re staying in place. But if you’re moving, consider shopping around for car insurance when you’re deciding where to live.
2. You’ve Had a Poor Customer Service Experience
Good customer service is far from a trivial selling point. It may bother you to wait on hold for a while to speak with an agent — but it’s a different matter entirely when customer service falls short after you’ve been in an accident. A responsive insurer that helps get your damaged car repaired or replaced quickly after an accident is worth taking the time to shop around for. And it’s not always easy to find — the car insurance industry has been struggling to catch up with the growth in consumer expectations for fast, high-quality service.
To get a sense for how an insurer might treat you, look at insurance company ratings, which generally include customer service in their evaluations. For example, J.D. Power released an auto insurance shopping study in 2021 that ranked Liberty Mutual and State Farm highest among large insurers in providing a positive purchase experience.
It’s also a good idea to talk to family, friends, and colleagues about how to shop for car insurance and recommendations on insurers they’ve had good experiences with. If you ever get into an accident, you’re likely going to be thankful that you didn’t forgo good customer service to save on car insurance.
3. You’re Newly Married
Marriage can be one of the most significant events in anyone’s life, with many newlyweds merging their financial responsibilities by living with each other, sharing income and expenses, paying taxes jointly — and deciding how to save on car insurance together.
There is little independent, hard evidence backing up marriage as a factor in reducing insurers’ risk. That’s led states such as Michigan, Montana, Massachusetts, and Hawaii to bar insurers from using marital status to calculate premiums. But it’s generally accepted that married people share or split chores that require driving and travel around together more frequently.
By taking advantage of auto insurance discounts, newlyweds can save money on car insurance. For example, married couples may benefit from listing multiple vehicles on one policy. These discounts vary significantly, so it’s important to shop around. On the lower end, Progressive’s multicar discount provides average savings of 4%, while State Farm’s equivalent discount is up to 20% and Geico’s goes up to 25%.
4. You Need To Insure a Teenage Driver
Married couples often have children, who may one day earn their own driver’s license. When your child is old enough, you’ll need to go shopping for car insurance. Typically, the easiest and least expensive way to insure a teen driver is to add them to your existing policy.
This process is costly, and there’s no way around it — teen drivers’ lack of experience significantly raises their risk of having an accident. As a parent, you can expect your rates to increase between 50% and 100% when you add a teen driver to your car insurance policy.
That’s a big expense for families, and one of the best ways to minimize how much it’s going to cost is to shop around. Also, remember that rates will decline as new drivers gain experience. Eventually, your teen driver will acquire their own car and insurance — meaning you can look forward to the day when you no longer have to cover your beloved offspring on your auto insurance policy.
5. You Need To Remove a Driver From Your Policy
Having a young driver ready to head out on their own might not be the only time you need to remove someone from your insurance policy.
Unfortunately, not every marriage has a happy ending. The current divorce rate in the United States is 2.7 divorces per 1,000 people. Just as newlyweds may choose to combine their financial obligations to save money on car insurance, newly separated or divorced couples need to go shopping for car insurance policies of their own.
And lives can end unexpectedly — something that’s been especially pronounced during the COVID-19 pandemic. In the event of a loved one’s death, be sure to check with and notify your insurance company in as timely a manner as possible to remove their name from your policy.
6. Your Credit Has Improved
If you’ve been diligent about paying your bills on time and reducing or eliminating debt, your credit report will reflect it. And when your efforts are paying off with the major credit reporting agencies, you may also earn a nice surprise when you shop car insurance policies.
Insurers in many states are allowed to use what’s called an insurance score, which is not the same as your credit score, says Myles Holley, an executive insurance professional at Barnum Benefit Advisors in Shelton, Connecticut. Insurance scores can be calculated in different ways but usually factor in payment history, outstanding debt, length of credit history, and other related information.
Keep in mind that some states — such as California, Massachusetts, and Michigan — prohibit insurers from considering credit when setting rates. Be sure to check up on the regulations in your state before shopping around.
7. You’ve Celebrated a Milestone Birthday
It may seem unfair, but your age — or how many years you’ve been driving — is a key factor in setting insurance prices. Here’s the logic: Young or new drivers have little experience behind the wheel and are therefore more likely to get in accidents than motorists who can show a safe track record. That means insurance rates are high for the newest and youngest licensed drivers, though they do decline over time.
Drivers should see their auto insurance rates level out after their 25th birthday — meaning it’s an ideal time to shop around. From that point on, age has a minimal effect on insurance premiums, according to Holley.
“Also, certain states look at how long someone has been driving as opposed to their age, so a 23-year-old with six years of driving experience could get a better rate than a 30-year-old with one year of driving experience,” he says. “However, once drivers start entering their 70s, they can see their rates start to creep again due to their age.”
8. Your Last Accident or Ticket Expired From Your Record
A moving violation or accident on your driving record will incur a surcharge, which is an extra fee or penalty that insurers add to your premium. But the good news is that surcharges eventually expire — and shopping around for car insurance with a cleaner record is sure to reveal savings.
“A general guideline is that there is a three-year surcharge window in which accidents and violations will cause a premium increase,” Holley says.
If you need help assessing your driving record, Holley suggests asking your insurance agent to run a free Comprehensive Loss Underwriting Exchange, or CLUE, report. This report provides information on your auto insurance coverage and losses, so making sure it’s accurate will help you receive the lowest quotes possible. Since a CLUE report only covers accidents, a record of your other violations can be ordered from your state’s Department of Motor Vehicles — but there’s typically a fee for doing so, Holley says.
9. You’re Driving a Lot Less Than You Used To
Perhaps you’re working from home more frequently and commuting less, or you’re driving your kids less often because they’re walking to school or off to college. Any reduction in these daily driving habits can add up over time, which in turn changes the risk — and cost — of insuring you.
Discounts vary by provider and location, but a 2018 Consumer Federation of America study of very low-mileage drivers found that, outside of California, those who drove 2,500 or fewer miles per year saved about 6% on their premiums annually compared with those who drove at least 22,500 miles per year. Very low-mileage drivers in Los Angeles saved 30% — a significant difference.
Such variations make it worthwhile to track your miles and shop for car insurance policies that reward low-mileage driving.
10. You Bought a New Car, Home, Motorcycle, RV, or Boat
Your insurance rates are tied to the car you’re driving. Whether it’s brand-new (or just new to you) will affect your premiums — especially if the new ride is worth more than your old one. Of course, you notified your insurer when taking possession of a new car, but since each company evaluates vehicles differently, it’s also a good time to shop car insurance policies.
That extends to any other major purchase that requires insurance, like a new home, motorcycle, recreational vehicle, or boat. Bundling your policies with a single insurer can pay off in insurance savings, though the exact amount will vary depending on the company and what’s being insured, among other factors. For instance, you can save up to 20% by bundling home and car insurance policies with Nationwide, while a similar bundle could save you up to 25% with Allstate.
With insurance pricing subject to different variables, requesting multiple quotes is the best way to ensure you’re getting the most bang for your buck.
The Bottom Line on Shopping For Car Insurance Often
It takes a little time and preparation, but shopping for car insurance regularly can pay off. Given the data available to insurers, auto insurance rates are constantly being refined and adjusted to both attract your business and turn a profit. Any significant change in your life or the way you drive is a good reason to shop around for car insurance.