How to decide when to shop for auto insurance

Shopping for car insurance: what to consider

As car insurance rates increase, so does the need to shop around for auto insurance. The best times to shop for car insurance are typically before policy renewals, but you can compare quotes, purchase a new policy and cancel an old policy anytime. To maximize the efficiency of your search, start by considering your budgetary and coverage needs and the priorities you have for your car insurance policy.

When deciding if you should shop around, devote some time — 15 to 30 minutes should be plenty — to evaluating your insurance. Consider answering questions, such as:

• Does your policy still fit your needs?
• Does your premium still fit into your overall financial budget?
• Do you still find the interactions with your company to be efficient and helpful?
• Have your policy coverage needs changed?

If you still like your company and are comfortable with your auto insurance premium and the type of coverage you carry, car insurance shopping may not be necessary. Your situation is unique to you; only you can weigh the pros and cons of staying with your current company versus shopping around and switching carriers.

When to shop for car insurance

If you want to get the best possible car insurance rate, you may be wondering when to shop for auto insurance. The reality is that there is no best time to get car insurance; unlike automakers, car insurance companies don’t run annual sales or come out with seasonal offers. You can switch companies, in most cases, whenever you want. Some people opt to shop for car insurance at least once a year — usually at the time of their policy renewal —  to ensure that they are getting the best rate for the coverage they need.

However, you could switch companies mid-policy, at the end of your term or even two days into your term. Some situations lend themselves to shopping around, and understanding the best times to shop for car insurance sooner rather than later can help you decide if you need to shop before a rate hike affects your budget. There is generally no penalty for switching car insurance companies, but make sure that you’re comparing policies with the same coverage types and amounts to ensure that you’re looking at prices for comparable coverage.

Here are a few situations that may lend themselves to shopping around for a new car insurance policy or company.

Your rates are increasing

Full coverage car insurance premiums increased by an average of 26 percent from 2023 to 2024. As of November 2024, the average annual rate is $2,458.

While rates are highly personalized and account for individual risk factors such as driving record and previous claims history, this increase was largely due to rising repair costs and more expensive vehicle prices. Car insurance saw a delayed impact from the widespread inflation that took off during 2020 and 2021, according to the Insurance Information Institute. Combined with an increase in claims and accidents as drivers got back on the road post-pandemic, many drivers have experienced rate increases recently.

As such, this might be a great time to shop around for more affordable coverage. Just be sure to choose the same coverage limits that you currently have when comparing quotes (or as close as possible), so you get a true price comparison. If you choose lower limits than you have now, you’ll likely get a cheaper quote, but you won’t truly know which company is offering the lowest price for the coverage you want.

You're moving to a new area

If you move to a new state, you’ll have to get a new insurance policy. Car insurance policies don’t transfer across state lines if you make a permanent move because each state has its own insurance laws. You’ll likely be asked to update your vehicle’s registration and insurance policy to your new state within 30 to 60 days. Insurance laws, coverage requirements, claims risks and the cost of living vary by state and can influence car insurance rates.

If you move to a new city or just a new ZIP code within your state, you’ll likely also experience a rate change when you update your address. Each geographic area comes with its own unique set of circumstances, such as traffic density, frequency of claims, cost of labor and rate of theft and vandalism. Insurance companies weigh these rating factors differently in their pricing algorithms, which leads to insurance premiums varying by carrier. This means that any move — even just across town — could mean it’s a good time to shop.

You're insuring a new family member on your policy

Your policy accounts for you and all the drivers in your household, which makes life events like marriage or having a new family member move in with you a good time to reevaluate your coverage. When you get married, you may need to add your spouse to your policy or vice versa. Similarly, if you have a family member move in, you may need to add them to your policy if they are a licensed driver. Because each household member’s driving record will be factored into the rate, it might be a good time to shop around for the best quote. Married couples generally pay 7 percent less for car insurance compared to single drivers as insurance companies perceive them as more financially stable and less likely to file claims.

If you have a teen driver in your household, you may want to gear up to shop your policy when they get their license. Bankrate’s study of average premiums found that adding a 16-year-old driver could increase car insurance premiums to $5,229 per year, on average. Young adults are one of the most expensive age groups to insure, but you may be able to find cheap car insurance for teen drivers with a bit of time and research. Make sure you get a quote for the teen on your current policy first, though, before you start shopping. That way, you’ll have a benchmark to use as a price comparison. You may find that your current company is the cheapest.

You purchased a new vehicle

The make and model of your vehicle is one of the biggest factors when it comes to how much you pay for auto coverage. The average cost of insurance for a Toyota Prius is $2,510 per year for full coverage, while the sportier BMW 330i costs $2,919 per year. The price and availability of parts and labor, the statistical likelihood of accidents, the safety features in your vehicle and the overall value of your vehicle can all impact premiums. If you purchase a new car and your current insurer increases your premium beyond a comfortable range, you may want to shop around to see if another carrier offers a lower price.

You've experienced a personal or financial shift

Since car insurance policies take into account several personal rating factors, it can be a good rule of thumb to consider reevaluating your coverage or company whenever you experience an important life change. Maybe you previously had one or more driving incidents on your record, but those infractions are now several years old, and you no longer require high-risk coverage. Or maybe you’ve had multiple hard credit inquiries that have caused your credit score to drop and increased your insurance risk profile. Even personal life changes like getting a work-from-home job could be a cause to shop for auto insurance if it significantly reduces your driving frequency.

How often should I shop for auto insurance?

Generally, it may be a good idea to shop for auto insurance when a life event happens — like the ones mentioned above — or when your premium is too expensive for your budget. Shopping more often could help you decide if your rate is still competitive, but most insurance professionals recommend against changing companies too often. Doing so may prevent you from earning potential loyalty discounts.

Additionally, although relatively rare, some carriers charge cancellation fees if you cancel your policy before your renewal. Some companies also have “earned premium,” which means that, regardless of how quickly you cancel, you forfeit a certain amount of premium to the company. Switching companies too often could subject you to cancellation fees and earned premiums, which might end up costing you more than it saves you.

First-hand insights: How often real drivers shop for insurance

When it comes to insurance shopping, there’s no one-size-fits-all shopping schedule. For examples of shopping strategies that work for real drivers, we turned to r/Insurance, one of the largest insurance-focused forums on Reddit, to hear from users who shared how often — and how — they shop for car insurance. While many users reported shopping for insurance as often as every six months, some offered insight into how insurance companies may penalize frequent carrier “hoppers.”

*The quotes and citations included on this page have been verified by our editorial team and are accurate as of the posting date. Outlinked content may contain views and opinions that do not reflect the views and opinions of Bankrate.

How to shop for auto insurance

If you're worried about auto insurance shopping being time intensive, you may find that the quote comparison process is quicker than you think, especially with online quoting tools. You may have heard in the past that you need to research your state’s minimum requirements before shopping to avoid purchasing less than you need to drive legally in your state. You can save time and avoid the research because this isn’t true. Insurance companies cannot legally offer you a policy below your state’s requirements. Because of this, you don’t need to know your state’s insurance requirements or research anything beyond a basic knowledge of car insurance. You can do this, and it’s easier than you might think! Here are a few suggestions to help you get started.

1. Know how to get quotes

Many insurance companies give you the option of requesting a quote online. But, if you’d like more help and information, call to speak with an agent or visit a local agent in person. If you choose to request a quote from an insurer’s website or utilize online quote comparison tools, be ready to provide information for yourself and any other drivers on the policy, including driver’s license numbers. To make comparing quotes easier, select coverage types and amounts that are as close to your current policy as possible.

According to Steve Ellis, an assistant vice president and claims field manager in the insurance industry, “Be wary of extremely low quoted premiums. If one quote comes in extremely low, ask clarifying questions to ensure you are comparing apples to apples.”

Also, keep in mind that online quoting tools may have limited functionality compared to an insurance agent’s tools. Some coverage types and discounts may not be available without speaking to an agent.

2. Double-check that your coverage meets your needs

According to Ellis, “There are a few things shoppers should keep in mind during the quoting process. The most important thing is to ensure you are matching your driving needs to the coverage being offered.”

This could mean adding ridesharing coverage, emergency roadside assistance or other endorsements, for example, if you need them. Ellis also points out that properly insuring your vehicle for any modifications, like lift kits or custom sound equipment, can help ensure you are properly financially protected.

3. Consider working with an independent insurance agency

Working with an independent insurance agency could be a good idea if you feel especially nervous about shopping. These agencies contract with multiple auto insurers and shop your policy for you. Licensed agents will also be able to listen to your specific scenario and help you craft a policy that fits your needs, including your budget.

If you’d rather not work with an agent, Bankrate’s rankings of the best car insurance companies and cheapest auto insurers for 2024 may be a good place to begin your search.

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