When was the last time you truly assessed your auto insurance expenses? We don’t just mean glancing at your quarterly bill. It’s all too easy to set up auto-pay and let your policy renew without questioning it. If you haven’t shopped around in over a year, you might be spending more than necessary.
Experts advise reviewing your options at least annually. "Comparing rates regularly helps you understand the market and your financial situation," says an insurance expert. Insurers adjust their pricing frequently, and switching providers can lead to significant savings.
As the New Year approaches, it's an excellent moment for an auto insurance review. Here’s what to ask and consider to ensure you’re getting the best deal possible.
Should you wait for your renewal to compare prices?
No. Many insurance professionals suggest checking rates every six months to secure the best deals. If you’ve prepaid for a more expensive plan, you can often receive a partial refund. Major life changes, like adding a new teenage driver or combining households, are also good times to reassess your rates.
Be ready for some startling numbers if you're insuring a teenage male driver. In 2020, 18-year-old males paid roughly $700 more monthly than their female counterparts for auto insurance, according to recent research. Rates can vary significantly based on your location and other factors.
Is it wise to only meet state minimum coverage requirements?
While it might be tempting to opt for the lowest rate, experts recommend carefully considering the level of protection you’re getting.
“Auto insurance can be complex,” says a financial planner. “Most states require liability insurance to cover damages to others in an accident. However, comprehensive coverage is not mandated. It’s a personal choice.”
Consider comprehensive coverage if your vehicle is still financed or relatively new, as it can help recover losses in case of theft or damage.
This type of coverage generally pays for incidents like theft, damage from severe weather, animal collisions, and more.
What factors should matter beyond cost?
Thanks to online resources, researching insurance company reviews is easier than ever. Look for customer satisfaction ratings from reliable sources. These ratings can reveal insights into how well a company treats its clients.
“Customer service ratings from reputable firms provide valuable information,” an expert notes. “Also, consider how straightforward it is to file a claim and the wait times for customer support.”
Another critical factor is whether your premiums will spike after an accident. Recent comparisons show that some insurers, like Allstate, tend to raise rates significantly post-accident, while others, like State Farm, are more forgiving.
What discounts might you be eligible for?
Discounts can vary by company, but maintaining a clean driving record, being a student or a senior driver, bundling home and auto insurance, driving less, or being part of a military family can all lead to savings.
Does your credit score affect your premiums?
In most cases, yes. Many insurers will consider your credit score when determining your rates, unless you reside in certain states. Research indicates that drivers with excellent credit can save about 35% on premiums compared to those with poor credit.
If your credit improves, it's worth checking if you qualify for lower rates.
Utilize online tools for policy comparisons
Online comparison tools can save you time by allowing side-by-side evaluations of different insurers. They help you find the best option before requesting quotes.
One popular resource provides a comprehensive guide to auto insurance rates, including comparative tools that show average rates for minimum and full coverage by state and company.
For optimal savings, compare at least three to four insurance companies. Other online platforms for comparison include various dedicated insurance sites.
Always ask for better rates
If you’re fond of your current insurance agent but want a lower premium, consider gathering quotes from other providers. Presenting these quotes to your agent may lead to matching or discount offers. If they can’t accommodate you, you’ll have the option to switch without regret.
