Finding a new auto insurance provider can be a time-consuming process, but shopping around isn’t difficult.
Still, many people don’t bother. Around 33 percent to be exact. In fact, the average American driver hasn’t switched their auto insurance for 12 years.
This often leads to higher premiums and a less-than-stellar policy. In this article, you’ll find several tips on how to switch car insurance companies.
Let’s start first with evaluating your current policy.
When your life changes, so should your auto insurance policy
Insurance rates and insurance needs change as your life situation changes. Consider the following example:
Let’s say you were 23 when you got your auto insurance policy. Three years later, imagine that you’ve gotten married, have a baby, moved, and bought your first home.
Those are five major factors that can significantly lower your auto insurance rate. Let’s look further.
All else being equal, most insurance companies will lower your rate once you turn 25. Joe Schneider of Allstate says that you’re considered “an experienced driver” then. You’ll also be “less likely to have an accident.”
In fact, CarsDirect reports that turning 25 could be the biggest decrease you see to your premium. This is because you’ll be moving out of an age group that is most likely to have accidents.
When you get married, two factors can lower your insurance, says Insurance.com.
First, you can often bundle more than one vehicle on one policy to get an average lower rate.
Second, statistics show that married people buckle up more and file fewer claims.
A 2004 study of over 10,000 New Zealand drivers showed that single people are almost twice as likely to have an accident than married people.
DMV.org also reports that most insurance companies will give customers with domestic partnerships similar rates to married couples.
Having a baby doesn’t directly lower your insurance rates. But according to esurance.com, it can cause changes that affect your rates.
For example, as a new parent, you’ll be looking to be as safe as possible with your new baby on board.
Thus, you may upgrade to a more secure vehicle with a much better safety record. You may look for the top of the line safety features like anti-lock brakes and daytime running lights.
And for fellow dads out there… don’t fight the “Baby On Board” sign. Just accept it.
If you bundle your home insurance with your car insurance, you can save a bundle (pun intended of course).
According to InsuranceQuotes.com, you can save 16 percent on each insurance policy when you bundle them. Plus, moving to a new zip code when you buy that first home can also lower your rate.
First, ask your current insurance provider to re-evaluate your policy
So are you ready to start shopping around for a cheaper and or better policy? If so, you should first call your current insurance company. Explain that you’d like them to do a whole new review of your driving record and other factors.
Be honest and let them know you are planning to shop around as this will motivate them to give you their best offer.
Be sure to mention all the critical changes in your life that could impact your policy. Remember—moving, driving less, getting a safer car, buying a home, or getting married are all factors.
The goal is to get the lowest possible quote from your current insurance company. This way you’ll have something to compare to all the other quotes you get.
This also gives you leverage to get a better rate from other companies you deal with.
If you don’t use your car often, you can now get a lower insurance rate from some companies that factor that into the equation. For example, Metromile charges you a small base rate plus a variable rate depending on how much you drive.
Your second step—shop around
Start shopping around at least two months before your current policy expires. This way, you can make sure you have enough time to check all the quotes you get before you make your final decision.
Be sure to get all quotes in writing, too. This prevents any misunderstandings or miscommunications. If a company is unwilling to put their quote in writing, consider that a red flag and avoid them.
Before you call or email other companies or insurance brokers, jot down some notes to have in front of you. This way you can be sure to give the same exact information to every company you contact, so you’ll be comparing apples to apples, not apples to oranges.
Your credit score matters
Your credit score can also affect your insurance rate. The Insurance Information Institute discusses this in detail in their August 2015 report.
The most important aspect of this report is from a 2014 study by WalletHub.com. They found that insurance companies varied considerably in how they use your credit score to determine your rate. So if you have some dings on your credit, it will be even more important for you to shop around.
Based on the information above, you may want to start shopping for a better policy early. This will give you time to pull your credit report and correct any mistakes. It’ll also give you time to take care of any negative information you find. Then you can order a new credit report to make sure it those marks got removed.