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Many people will reconsider their annual living expenses when the end of the year rolls around. This provides an occasion to verify if there are ways to save money so it can be used for other things.
Yearly expenses include car insurance and while a reevaluation is always a good idea, several key events make it worth your while to choose a new policy or at least do some comparative shopping.
The market for purchasing auto insurance is extremely competitive, so as a consumer you have more than one option. Even if your current provider offers discounts for long-standing customers, often the best discounts for car insurance are found when shopping. Rates vary and change often, so examining options at least once a year is always a good idea.
That said, some life-changing events make it worth shopping for a new auto insurance policy.
Buying a New Vehicle
If you buy a new car, you’ll want the best coverage for it. If you are already insured, you’ll need to contact your insurance agent to inform the company that you have changed vehicles. This automatically will cause your provider to update your insurance coverage, and this will generally bring a new cost of that coverage.
A determining factor when deciding your insurance premium is the manufacturer and vehicle model along with the year. Newer cars also have newer features that when needing replacement are more expensive, so premiums go up.
If you feel your current provider’s updated policy offer is too expensive, do some comparative shopping for several other quotes to find the best rate for your budget.
If You Move
If you move out of state, your insurance policy cannot accompany you or be transferred. Every state has its own set of insurance laws and requirements. Your policy’s cost is determined by the local rules and any specific coverage that is mandatory where you reside and drive.
When you move, you’ll most likely need a new policy to meet the obligations of the state that you are moving to. Your current insurance provider may not offer coverage in the state you are moving to. Consider a smaller independent provider in your new state or a state-specific insurer who can offer a cheaper policy with all the insurance minimum requirements.
If you move to another city or neighborhood in the same state, it’s also worth considering looking for a new policy. Crime rates linked to a specific zip code can lower or raise premium costs. If your new address includes a shorter or longer commute, this will affect your payments.
Premium costs tend to vary with the zip code. Highly populated cities with more vehicles represent the possibility of more accidents to insurers, so premiums usually cost more. Rural areas or suburbs may see a drop in rates because there is less traffic.
If You Add a New Driver
If you get married or have a teen getting his or her driver’s license, you will need to add a driver to your policy. An added driver will cost more. This is especially true if that driver is younger, so it’s worth it to consider shopping for a new car insurance policy so that you can get the best deal.
Motorists with bad driving histories will cost more as well as teen drivers. Young people are considered higher risk because they have little to no experience on the road, and are more likely to be involved in car accidents. You may consider buying a new car insurance policy. If you find other companies offering significantly lower rates or attractive discounts that you qualify for. Don’t hesitate to do due diligence about coverage and customer service quality.
Doing some comparative shopping will allow you to seek out discounts, especially for younger drivers such as a defensive driving course discount, a good student discount, or even a discount for students away from home.
If Your Budget Requires It
Perhaps your income has changed, or other kinds of expenses have increased. Maybe your actual premium no longer fits comfortably into your budget. As car insurance rates rise, fueled by inflation, your premium may become a stressor. If this is the case, it’s time to consider purchasing a new policy.
Other Reasons that Coverage Needs to Change
There are numerous other variables. Perhaps you have recently retired and drive less, or you have begun working more remotely, so you drive fewer miles. A shorter commute or fewer miles can translate into savings.
If you are driving an older car and have no interest in purchasing a new one, you may require less coverage. This is a great motive to consider more than one insurance quote.
If you change your employment, are completing high school or starting college, or have children that are, your insurance needs will be changing together with the usage of your car and who’s driving it.
When Shopping for a New Insurance Policy
When shopping, you’ll need to make sure you get all the coverage you need and want, while looking for discounts and the best rates.
- Compare what is covered
When engaged in comparative shopping do not just concentrate on the price. Compare the types of coverage offered with what your current policy includes. Large disparities in premiums should be a signal that you need to look at the coverage. When comparing price quotes, make sure the coverage is the same or similar.
- Check the length of the policy
Some providers may be offering a six-month policy that only appears to be cheaper.
- Consider bundling policies
One way to save money is to approach your provider of other kinds of coverage such as homeowners, renters, or life insurance, and see what they offer in car insurance. You may get a significant bundling discount because you have more than one policy with them.
- Consider using a broker
An insurance broker will do the comparative shopping for you.
Use the internet
There are numerous online comparative platforms available that can help you look at several options and their costs. This can make your shopping a great deal easier and save you time.
When to Consider a New Policy
Comparative shopping at least once a year can save you money and it can be an opportunity to better tailor your policy to your needs. If at some point during the year, you experience a major life change, make it a point to look at a new policy. Whenever you shop, compare policy terms and coverage levels before signing on the dotted line.