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When To Switch Car Insurance


Aug 31, 2023 #car, #insurance, #Switch

It might be easy to treat car insurance with a “set it and forget it” mentality. You know the coverage is there, so why worry about changing it or shopping for a different insurance provider? However, there are plenty of times when switching your auto coverage can lower your premiums or get you coverage that better matches your needs.

CNBC Select lists six of the most common reasons you should reconsider your insurance, and walks you through how to switch insurance if you decide it’s time for a change.

When to switch car insurance

You’re trying to save money

If you’ve already trimmed the fun (but pricey) discretionary spending from your budget and still need to cut down on expenses, shopping for a new auto insurance policy might be a good idea.

According to a 2022 study by ValuePenguin, 26% of policyholders save $200 or more a year after moving their coverage to a new provider. Try calling a few insurance companies and gathering quotes — you may be able to find a good deal.

For those looking for the cheapest car insurance, CNBC Select recommends Geico, which offers some of the lowest rates, as well as 16 types of discounts. Auto-Owners Insurance can be a good option if you’re looking for minimum coverage. The insurer offers highly affordable premiums, but it’s only available in 26 states.

Geico Auto Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Geico coverage and services are available in all 50 states and the District of Columbia and there are 16 different types of discounts available. In addition to the standard coverage options, Geico offers various optional add-ons, such as emergency roadside assistance, rental car reimbursement and mechanical breakdown insurance.

Auto-Owners Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Auto-Owners offers affordable premiums with high customer satisfaction ratings. There are 12 different types of discounts available, as well as various other types of insurance besides auto.

You’re driving less (or more)

SmartMiles® by Nationwide

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    SmartMiles® is one of the more widely available pay-per-mile auto insurance options. It offers affordable coverage by the mile, tracked through a device plugged into your vehicle or through your vehicle’s existing system for some models. For those who road trip often, only the first 250 miles of driving per day count towards mileage.

On the other hand, if you’re driving more, your annual mileage will be higher, which likely raises your insurance premiums. Shopping around for insurance can help you find coverage that will save you the most money.

Your family situation has changed

If you’ve recently gotten married, you can add your spouse to your auto insurance policy to potentially receive a discount. Plus, insurers often require that married couples share their car insurance policies if they keep all of their cars at the same residence.

On the other hand, if you divorce your spouse you’ll both need separate policies. In most states, divorce can also cause your premiums to increase.

Further, if you have a teenager who has started driving, adding them to your policy can be pricey since they don’t have much driving experience. Luckily, some insurance providers offer discounts for young drivers. As an example, State Farm advertises a good student discount of up to 25% and a Drive Safe & Save app which can save you up to 30% and teach your teenager to drive safely.

State Farm Auto Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    State farm is one of the largest auto insurers based on market share and has an excellent reputation for customer satisfaction. It offers 13 discounts, including ones for safe driving and young drivers.

You have bought a home

Geico Homeowners Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • Maximum coverage

  • App available

  • Policy highlights

    Policy covers property damage, personal property, personal liability, medical bills in the event that someone gets hurt on your property and living expenses for loss of use

  • Does not cover

    Additional coverage may need to be purchased for high-value items, like jewelry and fine art; be sure to ask your Geico agent about coverage limits for such items

You haven’t shopped for car insurance for a while

Maybe you haven’t experienced any events that would prompt you to switch auto insurance — but it doesn’t mean you shouldn’t. If you have stuck with the same provider for years, switching might bring savings. Additionally, the more years you drive, the less risk there is of you filing a claim (according to the insurance companies), which should lower your premiums.

And if you’re getting up there in the years, you’ll find that some companies offer lower premiums to seniors, so it pays to get a few quotes.

You’re not happy with your insurance company

How to switch car insurance

Switching your car insurance is a relatively simple process. Here’s what you’ll need to do:

  • Gather several quotes. Research your options and get a few quotes to find coverage that works best for you.
  • Figure out the cancellation fees. Your current insurer might issue a refund for the remainder of prepaid premiums if you’re terminating it early. However, many also charge early termination fees. If after canceling your policy, the refund and monthly savings don’t offset the fees, you might want to wait until the end of the term and not renew.
  • Purchase a new policy. It’s best to buy a new policy while your current one is still in effect. You want your new policy to start on the same day the old policy ends. This way, you’ll avoid a lapse in coverage.
  • Cancel your current policy. Once you confirm your new policy is good to go, you can cancel the old one. Note that your insurer might require a 30-day notice for cancellation. Additionally, they might ask for documents such as a cancellation form or letter.

Bottom line

Why trust CNBC Select?

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.


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