Every day, there are a bevy of auto insurance advertisements on television and the radio. Each one either promises to lower your rates, or give you better insurance. Like most savvy consumers, you would probably like the best of both worlds. That means a low rate on your auto insurance with great claim support, should you ever need to use it. The question is: where do you start?
Look at your current auto insurance policy
Before you go shopping for new insurance, it helps to know what you’re going to be comparing it to. Look at your policy agreement to determine your premium, deductible and amount of coverage. It’s easy to save money on your premium by raising the deductible or lowering the coverage, but that probably won’t get you the better insurance you’re looking for.
Think about more than the numbers. What do you like about your current insurance company’s customer service? What could be improved? When you are comparing auto insurers, several companies may offer similar prices. If that’s the case, it will help to understand what the service is like. Recognize how helpful the agent contacting you is and how they respond to your questions and needs. It can also help to ask family and friends what kind of experiences they’ve had with their auto insurance companies.
Think about what has changed
Depending on how recently you purchased your current policy, you may have had a lot of changes in your life. This can include marriage, kids, owning a new home or even just getting older. Check with several insurance companies to see whether you qualify for new discounts. You also might be able to bundle multiple life insurance policies together for more savings.
Similarly, car insurance companies have probably adjusted the rates for your area.
“Insurance companies are constantly adjusting their rates and also thinking strategically about managing their risk portfolio,” says Kerri Moriarty, head of company development at Cinch Financial. “It’s likely that the pricing strategy for your neighborhood has changed since you first took out your policy, so it’s worth a quick shop around to see what the rates in your neighborhood look like at other companies. Best practice is to shop that around every year, but every three years is good rule of thumb too.”
Moving across state lines can also have a large impact on your insurance costs. Your old state may have required certain levels and types of coverage that are optional now that you have moved to a different state. Be sure to ask insurance agents which types of coverages are no longer necessary, and what the ramifications are of dropping those coverage levels.
Consider comparison shopping
While you can send emails to every insurer you can think of, you might be missing out on great deals and companies. Some states have hundreds of insurance companies. This means there are probably insurance companies that you wouldn’t even know to check with. It helps to know all of your options before signing a six- or 12-month contract.
This is why our auto insurance reviews page has the filters you need, helping you sort which companies operate in your state, what discounts they offer, and even how they let you manage claims.
Don’t wait until the last minute
Procrastinators, beware of putting off shopping for car insurance. Not only can a lapse in coverage cause your rates to increase (and in some cases void your registration), there may be significant financial advantage to switching before your current policy expires.
“Many consumers don’t realize that you don’t have to wait until your current policy expires to make a change. There is a possibility you will be penalized for canceling early, but that may be worthwhile for a significantly lower rate,” says Richard Lewis with Elephant Insurance Co. “Another item some consumers miss: if you cancel a policy before it expires and you have prepaid, you should get a refund for the remaining amount of coverage minus any cancellation fees.”
Lewis adds that some companies may even offer an early-bird discount for switching before your existing policy is up.
Some of our recommendations
Every car insurance company is going to have different rates for different people, but when better coverage and customer service are also big priorities, there are a few companies that stand out from the pack.
Your next steps to better auto insurance
Determine when your current car insurance policy is set to expire. Some companies may have auto-renewal set up, meaning you will want to start shopping before you are locked in for at least six more months. A few weeks before the date you need to notify your current insurer, head over to our auto insurance reviews page and start comparing companies that might be a great fit. Give yourself plenty of time so that the process doesn’t feel rushed and you can make the best decision possible.