You do not need to switch car insurance companies every year, but you should periodically check whether your current policy is still competitive. A good time to compare quotes is before your policy renews, and it can make sense to shop sooner after a major change such as moving, buying a vehicle, adding a driver, changing how much you drive, or seeing a significant premium increase.
There is no universal rule for how often every driver should shop. The National Association of Insurance Commissioners (NAIC) has recommended reviewing insurance policies annually, while some state insurance departments recommend shopping at least every few years. The important point is not to assume that the company offering you a competitive rate several years ago is automatically still your best option today.
At a Glance: When to Shop for Car Insurance
| When to Compare Quotes | Why It May Matter |
|---|---|
| Before your policy renews | Lets you compare your new renewal premium with competing insurers |
| After a noticeable rate increase | Another insurer may price your particular risk profile differently |
| After moving | Location is one factor insurers may use when calculating premiums |
| After buying or replacing a vehicle | Vehicle value, repair costs, safety features, and other characteristics can change your rate |
| After adding or removing a driver | Your household’s driver profile may change substantially |
| When your driving habits change | Lower annual mileage or a different commute may affect pricing with some insurers |
| When your driving record changes | Older violations or accidents may eventually have less effect on your rate, depending on the insurer |
| When your coverage needs change | You may need different limits, deductibles, or optional coverages |
Key Takeaways
- Consider comparing car insurance quotes around renewal time rather than automatically renewing without checking the market.
- Shop sooner after major changes such as moving, buying a car, adding a driver, changing your mileage, or receiving a significant rate increase.
- Compare the same coverage limits, deductibles, drivers, and vehicles when evaluating quotes; otherwise, a cheaper quote may simply provide less coverage.
- Do not cancel your current insurance until the replacement policy is confirmed and effective, since even a short gap can leave you uninsured.
How Often Should You Shop for Car Insurance?
For many drivers, checking rates around each renewal is a reasonable habit. That does not mean you need to change insurers every time your policy renews. It simply gives you an opportunity to see whether your current price and coverage still compare favorably with other available options.
The NAIC has advised consumers to review their insurance policies once a year to make sure the coverage still fits their circumstances and the price remains competitive. The Texas Department of Insurance, meanwhile, advises consumers who are unhappy with their price to shop around and says that shopping at least every three years is a good idea.
These are consumer-shopping guidelines, not requirements. You may have little reason to switch if your premium remains competitive and you are happy with your insurer. On the other hand, several events can make it worthwhile to compare rates before your next normal shopping cycle.
Why Car Insurance Rates Can Change
Your premium is not determined by one factor. Insurers may consider your driving history, vehicle, location, mileage, coverage selections, claims history, prior insurance and other factors permitted in your state. Each insurer also has its own rating methodology, which helps explain why two companies can quote very different premiums for the same driver.
RateFrog’s guide to the factors that influence auto insurance rates explains these variables in more detail.
Insurers can also change their underlying rates over time. For example, the Texas Department of Insurance explains that insurance companies submit rate filings and that changes must be supported by actuarial information under state law. Other states have their own rate-review systems and requirements.
As a result, your renewal price can change even when you have not recently caused an accident or received a ticket. That does not automatically mean another insurer will be cheaper, but it gives you a reason to compare.
8 Times You Should Consider Shopping for Car Insurance
1. Before Your Policy Renews
Your renewal is one of the easiest times to review your coverage and compare prices. You already have a renewal offer from your current insurer, giving you a useful benchmark for competing quotes.
Start early enough that you have time to review the details rather than choosing a policy at the last minute. When requesting quotes, use your current declarations page to help match liability limits, deductibles, optional coverages, drivers, and vehicles as closely as possible.
2. After Your Premium Increases
If your renewal premium rises noticeably, ask your insurer what changed. The increase could relate to your personal rating factors, a change in coverage, a lost discount, or broader changes in the insurer’s rates.
Then compare several quotes. Insurance companies do not all price the same driver the same way, so a rate increase from your current company does not necessarily mean every insurer will charge a similar amount.
3. After You Move
Where a vehicle is principally kept can affect insurance pricing. Moving across town, to another ZIP code, or to another state can therefore change your premium.
A move to another state is particularly important because insurance laws, required coverages, available insurers, and policy forms can differ. Tell your insurer about the move and compare policies that meet the requirements of your new state.
4. When You Buy or Replace a Vehicle
Different vehicles can have very different insurance costs. Vehicle value, repair costs, theft experience, safety characteristics, performance, and other factors can affect premiums.
If you are buying a vehicle, consider getting insurance quotes before completing the purchase. Two similarly priced vehicles can have different insurance costs, and comparing ahead of time can help you understand the total cost of ownership.
5. When You Add or Remove a Driver
Adding another household driver, particularly a newly licensed driver, can materially change your premium. Removing a driver who no longer lives in the household may also change your rate, although insurers have their own rules about which household members must be disclosed or listed.
If you are adding a young driver, also ask about applicable car insurance discounts, such as good-student, driver-training, or student-away-at-school discounts when offered and when eligibility requirements are met.
6. When Your Mileage or Driving Habits Change
If you begin working from home, retire, change jobs, or otherwise drive substantially fewer miles, update the annual mileage reported to your insurer.
Some insurers offer low-mileage discounts, while others incorporate estimated mileage or vehicle use into their regular rating calculation. Usage-based or telematics programs may provide another option for certain drivers, depending on the insurer and state.
7. When Your Driving Record Changes
Accidents and traffic violations do not necessarily affect insurance pricing forever. How an incident is treated depends on factors such as the type of event, when it occurred, the insurer’s rating rules, and applicable state law.
If an older incident is no longer being considered by one or more insurers, new quotes could look different from the prices you received several years earlier.
8. When Your Coverage Needs Change
Price should not be the only reason to review your policy. Your financial situation and coverage needs can change as well.
For example, you may want to reconsider your liability limits, deductibles, collision and comprehensive coverage, rental reimbursement, roadside assistance, or other optional coverages. If your vehicle is financed or leased, remember that your lender or lessor may also require certain physical-damage coverage.
Your declarations page is a useful starting point because it summarizes the coverages, limits, deductibles, vehicles, and drivers shown on your policy. The complete policy controls the actual terms, conditions, and exclusions.
What About Your Credit?
Credit can affect auto insurance pricing in many states, but the subject requires some important qualifications.
Insurers that use credit generally rely on a credit-based insurance score, which is not the same thing as the consumer credit score commonly associated with borrowing money. According to the NAIC’s current guidance on credit-based insurance scores, state laws place limits on their use, and some states restrict or prohibit certain uses altogether.
If your credit history has changed substantially and you live in a state where insurers are permitted to consider credit-based insurance information, it may be worth comparing quotes. Do not assume, however, that improving a traditional credit score by a specific number of points will translate into a particular insurance savings amount.
How to Compare Car Insurance Quotes Correctly
A lower number on a quote is useful only if you understand what you are comparing. The NAIC’s auto insurance shopping materials emphasize comparing the same or similar coverage between companies.
- Use the same liability limits. A quote with lower liability limits will naturally tend to cost less but also provides less protection.
- Match deductibles. Compare the same collision and comprehensive deductibles whenever possible.
- Match optional coverages. Check rental reimbursement, roadside assistance, uninsured/underinsured motorist coverage, medical-related coverages, and other options applicable to the policy.
- Use the same drivers and vehicles. Make sure each insurer is rating the same household information.
- Review discounts. Confirm which discounts have actually been applied rather than assuming you qualify based on an advertisement.
- Compare the total premium. Focus on what you would actually pay for comparable coverage, not the number of discounts an insurer advertises.
The NAIC’s consumer guide notes that different insurers can charge different rates for the same coverage and recommends shopping among multiple companies. Its shopping materials also recommend obtaining multiple quotes rather than relying on a single alternative.
Should You Automatically Choose the Cheapest Quote?
Not necessarily. Price is important, but it is only one part of the comparison.
Check that the insurer is licensed in your state and review available information about complaints and service through your state insurance department. Also look carefully at coverage limits, deductibles, exclusions, optional benefits, payment terms, and other policy features.
A slightly cheaper policy may not be a better value if the quote achieves the lower price by reducing coverage you want or increasing a deductible beyond what you could comfortably pay after a loss.
Do You Have to Wait Until Renewal to Switch Insurance Companies?
Generally, consumers can request cancellation of an auto policy before its scheduled expiration, but the procedure, possible fees, refund calculation, and other rules can depend on the insurer, policy, and state.
Before switching mid-term, review your current policy and ask your insurer about any applicable cancellation terms. RateFrog’s guide to canceling auto insurance explains the basic process.
Avoid a Coverage Gap When You Switch
If you decide to change insurers, confirm that the new policy is active before ending the old one. Do not cancel your existing insurance merely because you received a quote.
A quote is not necessarily the same thing as bound, active coverage. Confirm the effective date of the replacement policy and obtain proof of insurance before terminating the previous policy.
This helps prevent an unintended lapse in auto insurance coverage. Depending on your situation and state, a lapse can create legal, financial, registration, or future insurance-pricing problems.
Frequently Asked Questions
Is It Worth Shopping for Car Insurance Every Year?
It can be. Checking quotes around renewal time lets you see whether your current premium remains competitive. You do not need to switch simply because another year has passed, but periodically comparing equivalent policies can help you make an informed decision.
How Many Car Insurance Quotes Should I Compare?
Getting quotes from several insurers gives you a better basis for comparison than checking only one alternative. NAIC consumer shopping materials have recommended getting at least three quotes when shopping for auto insurance. Make sure each quote uses comparable coverage limits and deductibles.
Should I Shop for Insurance After My Rate Goes Up?
A significant renewal increase is a reasonable reason to compare quotes. First ask your current insurer why the price changed and whether all applicable discounts are being applied. Then compare equivalent policies from other insurers to see how their pricing differs.
Should I Switch Insurers Just to Get a Lower Rate?
Price is important, but compare coverage, deductibles, policy features, insurer licensing and available complaint information as well. A lower premium is most meaningful when you are comparing substantially equivalent insurance.
The Bottom Line
Staying with the same auto insurer can be perfectly reasonable when the company continues to offer suitable coverage at a competitive price. The mistake is assuming that it does without ever checking.
Consider reviewing your policy around renewal and comparing rates periodically. Shop sooner if your premium changes significantly or your circumstances change, particularly after moving, replacing a vehicle, adding a driver, changing your mileage, or changing the coverage you need.
When you compare, use the same coverage and deductible assumptions for every quote. That gives you a much clearer picture of whether switching insurers would actually improve the value of your policy.
Sources
- National Association of Insurance Commissioners: Consumer’s Guide to Auto Insurance
- National Association of Insurance Commissioners: Comparing Online Auto Insurance Quotes
- National Association of Insurance Commissioners: Credit-Based Insurance Scores
- Texas Department of Insurance: How Auto and Homeowners Insurance Costs Are Calculated
- Texas Department of Insurance: Ask for Discounts and Shop Around