When to shop for car insurance

Driver status

One of the most important factors in determining the cost of your car insurance is your driving record. Your driver status affects not just the cost of your liability coverage, but also the cost of your collision and comprehensive coverage (if you have them).

You’ve lost your good driver status

Sometimes life throws you a curveball and you get caught speeding, you get careless while partying and get a DUI, or worse you cause a car accident and your insurance has to pay for physical damage or injuries to the other drivers. 

If you’ve recently experienced a change to your existing insurance policy related to a lapse in judgment, it’s worth looking around at what other companies will charge you. 

Some companies may care less about your recent mistake’s impact on your overall insurance profile than your current one does. Also, accidents impact your insurance cost from 3-7 years depending on the insurer.

Your driver status has improved

Even though moving violations and crashes increase your insurance premiums, your driving record improves over time after that (assuming you stay out of trouble). If it has been 3 years since your expensive oopsie, it’s time to get new car insurance quotes. Pay attention to “safe driver” and “good driver” discount opportunities when you’re shopping around.

Adding new drivers to your policy

Since the driver is the one who is insured under your liability coverage, and your driving record significantly impacts your premium cost, it shouldn’t surprise you that when you add new drivers to your policy it’s time to shop around.

Moving in

When you move in with a partner or a roommate who will drive your car, you need to add them to your car insurance policy. If you have a great driving record and your new roomie doesn’t, it might not make sense to add them to your policy at all (the overall cost will go up). If you opt out of adding them to your policy, you should note they may or may not be covered if they get into an accident while driving your car. 

Getting married

When you get married, you want to shop around for car insurance. According to The Zebra (an insurance broker), married people save, on average, 7% (around $140/yr) over their single, widowed, and divorced colleagues. This is a wonderful time in your life — make it a little more wonderful by getting a new car insurance policy and enjoy the savings!

Teen drivers

Generally it costs more to insure teenagers because drivers 16-19 years old have almost 3x as many fatal crashes as drivers 20 and older. When you add a teen driver to your policy, your premium will go up. If you’ve got a teen who is about to get that coveted driver’s license, it’s a good time to shop around for new car insurance quotes. If they’re a good student, you might be eligible for a discount.

Make sure you tell your kids to buckle up! 56% of teens drivers and passengers killed in fatal crashes in 2020 were not wearing a seatbelt.

Lifestyle changes

There are literally thousands of factors which go into the price of your car insurance premium. These two in particular have an outsized impact on what you pay.

Moving to a new zip code or state

When you move, if you leave your zip code, you’ll need to change your insurance policy. Rather than just notify your current insurer that you’ve relocated, you may want to take the opportunity to shop around.

Many insurers don’t operate in every state. If you move out of state, your insurer might not be available or may charge less competitive rates than in your current location. While maintaining your loyalty discounts might be desirable, this is a good time to check if more affordable car insurance is available in your new location. 

It’s also a good time to look at smaller insurance companies you may not be as familiar with — especially if you’re a good driver.

Many insurers have pricing which differs from zip code to zip code. If you own a home you have likely considered the old real estate adage “location location location.” This typically refers to home values based on local amenities and schools or distance from environmental hazards. 

When a car insurer is thinking about your zip code, they’re thinking about crime, specifically car theft and vandalism, and natural disaster likelihood like tornadoes, hurricanes, floods, fires, and animal issues. For this reason, whenever you move, it’s worth checking out how the move impacts your car insurance prices.

Change to number of cars

When you add a new car to your insurance policy or drop an old one, you should shop around. Find out what your current insurer will charge for your new ride and then get a couple of other quotes to see if they’re in line with the local market or not. Some cars are notoriously difficult to insure if they’re generally unsafe, while other cars can carry a higher than usual risk of theft (like Kias and Hyundais) and some insurers may have more lax policies about such things.

Major financial changes

A major change to your financial situation is probably one of the less-considered opportunities to shop around for car insurance. Here are three examples of when you should definitely reconsider your car insurance setup.

Windfall

Whether you inherit the money, work for a startup with an exit event, or win the lottery, the result is the same — you now have considerably more assets to protect than you did before. When we’re talking about asset protection, what we’re really saying is that you probably want more liability coverage. Learn more about what kind of liability coverage you should have when your net worth crosses the $1m mark.  

Credit score changes

There are four states which outlaw the use of credit score as a rating factor when assessing your car insurance premiums: California, Hawaii, Massachusetts, and Michigan. Washington’s ban on using credit scores was overturned in 2022. 

Among the remaining states, your credit score is a major factor in determining how much you’ll pay, though it varies by state on how it can be used and how much of a factor it is. According to The Zebra, GEICO, Progressive, and State Farm all do a credit check during the quote process.

Bought a house

In addition to the considerations regarding Windfalls above, when you buy a house you open the door to insurance bundling. Whether you bundle all of your insurance policies with one carrier (because they offer a multi-policy discount) or you shop around for policies with different carriers, your asset mix has changed and you want to make sure all of your insurances play nice together. For example, some things that happen to your car might be covered under your homeowners insurance.

You've turned 26, 30, or 65

Turned 26? If you started driving at 16 years old and you have a clean driving record, your insurance should be lower by the time you turn 26. This is definitely a good time to shop around for a new policy, even if your current one doesn’t expire for a while.

Turned 30? Between the ages of 30 and 65, all other things being equal, your car insurance prices are pretty consistent and your birthday is not a reason to shop around, but you should double check your premiums when you turn 30 because this is one of those random ages where people seem to become more responsible (according to insurance actuaries).

Turned 65? If you’ve turned 65, you should shop around because you might be eligible for retiree discounts.

Your car is getting older

It’s probably not surprising that new cars cost more than their used counterparts to insure, but the savings from year to year are on the minimal side. Your current insurer will probably automatically drop your rates, but it never hurts to have another quote to compare with their proposed discount.

What exactly is dropping? When we look at liability coverage, the price doesn’t change much from year to year, even as your car ages. This is because liability coverage is about the damage you do to other people’s vehicles, not your own.

Instead, it’s the collision and comprehensive coverage whose prices vary depending on the age of your vehicle. Here are some takeaways from this murky deep dive on car insurance prices as they relate to the age of your car.

1. For cars under $40k in value, insurance premiums seem to be cheaper when they’re new than as they get older. Definitely reevaluate your insurance when your car reaches 3 years old to make sure you’re getting the best deal you can.
2. For cars between $40k and $100k in value, premiums are all over the map. All the more reason to get new quotes every year.
3. For cars over $100k in value, definitely check your insurance premium every year. For some reason the premiums get more expensive each year until they turn 3 years old, at which point due to the accelerated depreciation of these vehicles, insurance premiums drop significantly, faster than any other range of car value.

Average monthly premium by car value & age

These quotes include 100/300/100 for liability coverage with $500 collision and comprehensive deductibles. It includes UI/UIM and PIP where required by law.

Where our data comes from

All of our quote data assumes the driver is: single, college educated, has a clean driving record, and has been driving since 16 years old. Age, gender, location, and miles driven per day are variable. We do not consider any discounts which might apply to you such as those for being a veteran, having multiple policies, loyalty, etc. 

Note: As Coverage Cat founder Max Cho likes to say, “insurance prices are weird.”