How Often Should You Shop for Car Insurance?

INSURANCE - CAR INSURANCE
There’s no limit to how often you should shop for car insurance, but it likely makes the most sense if you’re about to renew or change your policy.
Updated Sept. 26, 2023
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It typically makes the most sense to shop for car insurance if your policy is about to renew. This gives you an opportunity to compare available rates in your area and switch if you find something cheaper or better than your current plan.

But you can also compare car insurance rates when you move, improve your credit score, or make changes to your policy. In these and other cases, you may find cheaper rates by doing a quick comparison search.

Let’s dig into how often you should shop for car insurance and go over the steps to take when shopping for a new car insurance policy.

In this article

How often should you shop for car insurance?

There are certain situations when it makes the most sense to shop for car insurance. Aside from these situations, you can also shop for car insurance as often as you want or feel the need to. There’s no limit on how often you can check auto insurance rates or get car insurance quotes.

Before renewing your policy

The period before your policy renewal is a natural time to shop around for car insurance. This is typically when you can switch policies between different insurers without incurring any cancellation fees.

If you find a more affordable car insurance quote that provides the coverage you want, feel free to switch to a new policy.

Learn how to switch car insurance.

Keep in mind
Customer service experiences can vary between car insurance companies. It may be worth paying a bit extra if you know claims are more likely to be processed without any problems.

Once every year

It doesn’t hurt to compare car insurance costs every now and then to make sure you’re always getting a good deal. This could be once a year or a different time frame of your choosing. Comparing rates once a year can make sense if that’s how long your car insurance policy lasts.

Shopping for car insurance once a year can be more convenient than every few months. If you don’t like frequently shopping for new rates, this can be a good pace to ensure you’re getting a good deal on your auto insurance.

Before making changes to your policy

A good time to compare car insurance rates is before adding a driver or vehicle to your policy. Depending on the situation, such as adding a teen driver, you may end up paying higher car insurance premiums for the changes you make.

A quick comparison of different car insurance providers can give you a sense of whether it makes financial sense to stay with your current company or to go with someone else.

Keep in mind
Switching insurers may not make sense if you have to pay a cancellation fee.

When you move to a new place or state

Where you live is one of many factors that affect car insurance rates. So if you move to another location, it makes sense to see what coverage is available in your new area.

This is especially important if your current policy doesn’t operate nationwide and you’re moving to another state. Each state also has its own laws regarding minimum car insurance requirements, so you want to make sure you have the coverage you need in a new state.

Warning
Moving to a new state typically requires you to get a new insurance policy even if you stay with the same issuer.

After your credit score improves

Some auto insurance companies may check your credit report using a soft inquiry, which has no impact on your credit score. Other companies may use a credit-based insurance score.

This score check is one of many factors that can affect your car insurance rates, so having a better credit score may give you better rates. You might qualify for lower rates if you’ve recently improved your credit score.

How to shop for a new auto insurance policy in 5 easy steps

Knowing how to get car insurance can help you save money on your coverage. There are five steps to consider if you’re shopping for a new auto insurance policy.

1. Review your existing coverage

There’s no one answer for how much coverage you need aside from the required state minimum car insurance where you live — apart from New Hampshire, which has no minimum. But you can review your existing coverage to see whether it meets your needs or if you need to make adjustments.

For example, you can choose the minimum liability coverage to meet your state’s car insurance laws while having an affordable insurance premium. But would it be enough insurance to financially protect you in an accident? In some accidents, this coverage may not be enough.

2. Determine the new coverage you need

If you’ve reviewed your existing coverage and found you need to make some changes, it’s time to determine how much coverage you actually need. This will typically vary depending on your situation, especially where you live.

For instance, you may consider adding comprehensive insurance to your policy if it hails frequently in your area. Comprehensive coverage could also make sense if deer or other animals frequently cross the roads you drive on.

On the other hand, you may consider removing optional coverage that you don’t need. For example, you may not need original parts or rental car reimbursement coverage. This should save you money on your premium.

3. Gather the required information

Car insurance quotes can vary by company, but most insurers typically require a lot of the same information. You can gather this information before you fill out a quote to help quicken the process.

Here’s some of the information you might need on hand:

  • Name and date of birth
  • Gender and marital status
  • Phone number and address
  • Driver’s license number
  • Number of vehicles and their applicable information (make, model, year, vehicle identification number, etc.)
  • People you want to add to the policy
  • Type of coverage you want to add
  • Coverage limits and deductibles
  • Information for potential discounts, such as government or military affiliation

4. Use an auto insurance comparison tool

Once you have the information you need on hand, it’s time to get some car insurance quotes and compare rates. You have a few different options for comparing rates, including checking individual insurance websites or calling an insurance agent.

But it’s typically quicker and more efficient to use an auto insurance comparison tool. In general, these are websites that find car insurance rates from many or all available companies in your area using the information you provide.

So rather than getting one rate at a time from different companies, you can see some of the best rates at once in one location. Even better, the best car insurance comparison sites are typically free and easy to use. Simply plug in your information and let the tool do the rest.

5. Choose the best quote

The process of using an auto insurance comparison tool to compare rates doesn’t typically take more than a few minutes if you already have the required information on hand. Once you receive your results, you can compare rates and coverage between different companies to see which provider makes the most sense for you.

Keep in mind that it’s often best to compare apples to apples when analyzing car insurance coverage options. This means that quotes from separate insurers should include the same types of coverage and discounts if you want to fairly compare their rates.

For example, one car insurance rate can be cheaper than another because it has lower coverage limits or a higher deductible. But that’s not a fair comparison because the limits aren’t the same.

Keep an eye out for these details to make sure the quotes you’re comparing are as identical as possible.

3 things you should know before shopping for car insurance

Shopping for car insurance can be overwhelming if you’re not familiar with how insurance works or the different terms associated with auto insurance quotes. Let’s look at three things to keep in mind while you shop and compare car insurance rates.

Types of coverage

Car insurance is typically separated into different types of coverage, including:

  • Liability
  • Collision
  • Comprehensive
  • Uninsured or underinsured motorist
  • Medical payments or personal injury protection

The insurance requirements vary by state, but many states only require a minimum amount of liability coverage for you to legally drive.

However, it can make sense to add other types of coverage for more financial protection, including if another driver doesn’t have car insurance to cover accident expenses. Just be aware that your premiums are likely to increase as you add more types of coverage to your policy.

Explore the car insurance types and learn what each of them means.

Coverage limits and deductibles

You can select different types of coverage for your car insurance policy along with different limits for each type of coverage.

For example, you may have up to $100,000 in property damage liability coverage per accident. This may cover up to $100,000 in property damages for an accident you cause.

But if you only had up to $25,000 in property damage liability, you might only be covered for up to $25,000 in property damages for an at-fault accident. Depending on the situation, this may leave you financially liable for the rest.

Similarly, you can also choose deductible limits for certain types of coverage. This is the amount of money you would pay before your coverage kicks in. This is common for collision and comprehensive insurance.

Keep in mind
Higher coverage limits and lower deductibles typically raise your premiums.

Discounts

Car insurance discounts are common but often vary by insurer. It makes sense to check available discounts with each provider to see which company might offer you the cheapest rates.

Here are some common car insurance discounts:

  • Multi-policy
  • Multi-vehicle
  • Military affiliation
  • Government affiliation
  • Good student
  • Homeowner
  • Pay in full
  • Safe driver
  • Clean driving record
  • Safety equipment
  • Anti-theft equipment
  • Defensive driving course

FAQs about shopping for auto insurance

Should you always shop around for car insurance?

Before you buy a new insurance policy, it typically makes sense to shop around first. This is often the easiest way to find cheaper car insurance rates, and it doesn’t take much time if you compare quotes online.

You can compare quotes by checking individual car insurance websites or using a car insurance comparison site that quickly gathers all available rate information in one convenient location.

Does shopping for car insurance affect my credit score?

Getting a car insurance quote doesn’t typically affect your credit score, even though an insurance company may check your credit history. This is because car insurance providers that check your credit report use soft credit checks, which have no impact on your credit score. So feel free to compare as many different car insurance quotes as you want.

Is it cheaper to buy insurance yearly or monthly?

Depending on your insurance provider, buying car insurance on a yearly or annual basis may be cheaper because some insurance companies provide discounts if you pay your premiums in full. Remember that some insurance providers may only allow you to pay up to six months’ worth of premiums at a time, which could still be cheaper than paying monthly.

Bottom line

You should shop for car insurance as often as you need to, but it typically makes the most sense if you’re about to renew your policy or make changes to your policy. It can also be helpful to compare car insurance quotes if you recently moved or improved your credit score.

Remember that comparing car insurance rates is often the easiest way to find cheaper coverage. Check out our list of the best car insurance companies.

  • You could save up to $500 with some companies
  • Compare dozens of providers in under 5 minutes
  • Fast, free and easy way to shop for insurance
  • Quickly find the perfect rate for you

Author Details

Ben Walker, CEPF, CFEI® Ben Walker, CEPF, CFEI®, is a Senior Credit Cards Writer at FinanceBuzz. For over a decade, he's leveraged credit card points and miles to travel the world. His expertise extends to other areas of personal finance — including loans, insurance, investing, and real estate — and you can find his insights on The Washington Post, Debt.com, Yahoo! Finance, and Fox Business.

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