When Should You Change Auto Insurance Providers?

When Should You Change Auto Insurance Providers? article image.

Has your auto insurance lost its luster? You may be considering a switch if you think you're paying too much, had a poor customer service experience or need coverage your current insurer doesn't offer. Yet, you don't want to change carriers on a whim.

So, what's the right move? The best advice for finding and maintaining the best auto insurance policy is twofold: Shop frequently, and switch only when it makes practical sense for you.

When Should You Shop for Auto Insurance?

You can shop for auto insurance anytime, even in the middle of your policy term. Although an upcoming renewal is a good occasion to review your coverage and shop around, you can change policies whenever you want. More to the point, you can always seek out additional information at your leisure: There is never a downside to looking for the best auto insurance option, whenever inspiration may strike.

That said, if any of the following scenarios apply to you, now is an excellent time to start investigating new auto insurance options:

  • Your policy renewal is soon.
  • You're making a change such as adding a new driver, buying a new car, or upgrading or downgrading your coverage.
  • You need to save money.
  • Your creditworthiness has improved (credit can affect insurance rates in most states).
  • Your current insurance provider is raising your premium.
  • You've experienced poor customer service.
  • You want to start bundling your auto, home and/or life insurance.
  • Your rates have increased because of an accident or speeding ticket.
  • You want a special type of coverage or related service.

Tailoring Your Coverage to Save Money

The first thing to do when you're comparing auto insurance alternatives is to look at your current policy. If you're in the market to save money, reviewing your coverages for savings opportunities is a good place to start. You might even kick things off by contacting your current insurance company to ask about modifying your coverage or applying discounts to bring your premium down.

Additionally, consider these three ideas for fine-tuning your policy to reduce your auto insurance costs:

Downgrade your coverage. If you own your car outright, nixing comprehensive and collision coverage can bring down your premium drastically. This coverage kicks in to help you pay for repairs or replace your vehicle if you're in an accident or another covered event (vandalism, for instance). Review your policy for "extras" like roadside assistance or car rental coverage. Proceed with caution, though: Downgrading your coverage is only a good idea if your remaining coverage and savings are such that you won't be left high and dry if something happens to your vehicle.

Check your credit. In most states, insurance companies use what's called a credit-based insurance score to help determine premiums. Check your credit report and score to see where you stand. If your credit is good, it may be a bargaining chip when you talk to prospective insurance companies. If not, taking steps to improve it can help bring down your premiums.

Look for discounts.. Auto insurance companies offer discounts for a variety of things: being a good driver, having multiple policies (such as auto, home and life), belonging to affiliate groups, having good grades—the list is usually long. Take a close look at each company's list of available discounts, note the ones that apply to you and make sure your insurance provider is including them in your premium calculation.

Finding Alternatives and Comparing Companies

Once you have a clear idea of what you want in a policy, you can start doing some shopping. The quickest way to get a range of offers is to use an insurance comparison site like The Zebra. By inputting some basic information, you'll see what the marketplace has to offer—and get a ballpark estimate of what coverage would cost from various insurers. Seeing what's out there is an important step if you want to save money on auto insurance.

And there are, of course, plenty of other ways to choose a new insurer. Do friends or family have an insurance provider they'd recommend? Have you checked online reviews? You might check which companies rank well in competitive analysis, such as the J.D. Power Auto Insurance Satisfaction Study. Or it may be more important that your insurer covers a wide range of vehicles and offers different types of insurance. If you're interested in a particular type of coverage, like pay-per-mile insurance, look for a company that offers it.

How would a new insurance company stack up against your current provider? Check J.D. Power's customer satisfaction ratings for insurers in your region. Also, look at insurance ratings on sites like A.M. Best or Standard & Poor's. They can help you evaluate the financial stability of any companies you're considering.

Switching Auto Insurance Carriers When It's Right for You

You've reviewed your policy, gotten quotes and narrowed your options down to a few potential alternative insurers. It's time to plan your next move. Should you choose a new insurance carrier or stick with your current one? Answers to the following questions may help you decide.

  • What do you give up if you leave your current insurer? Are there any penalties for switching? Will you lose accident forgiveness, which often kicks in after a few years with the same provider? Is there a recent accident or moving violation that might cause your rates to go up at renewal time, but renewal is still several months away? If so, you may want to wait until it's time to renew, since any new policy you shop for now will take your accident or ticket into account when pricing is set.
  • Do you like doing business with them? If you've had a great experience with your insurance company, that might be worth a few extra dollars. If you've had a negative experience, there's no reason not to switch if you find a better deal elsewhere.
  • Do you need something your insurer can't offer? Whether it's vintage car insurance, an insanely low price or an easy-to-use app, your needs simply may not intersect with what your insurance carrier has to offer. If that's the case, it's time to move on.

If you make a change, be sure to avoid any gap in coverage. It's better to overlap policies by a few days than to risk going without insurance, even for a short time. Operating a car without insurance is illegal in most states. It's also tempting fate.

Make the Move That's Right for You

Shopping for auto insurance and comparing policies can take a little work. And, honestly, it's hard to work up a lot of passion for a product you hope never to think about or use, which is certainly the case with auto insurance. But knowing you have the best available option may help you sleep better at night, and that in itself might be the best perk of choosing the right insurance.