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Why You Should Shop for New Car Insurance at Least Once Each Year

Updated on August 24, 2014

You Should Review Your Car Insurance Options Every Year

Car insurance is just like any other major expense you might incur. Not only should you shop around for the best deal when you first insure your car, but you should shop around everytime your insurance provider raises your rates. It ires me when I get a rate increase, even though I have no dings on my driving record, and I don't think I should have to share the increased risk caused by bad drivers.

If you search around and ask for quotes from various insurance companies, you most likely will find one that will offer you a better rate for comparable coverage than your current provider. As soon as you get a quote from a company that is going to give you a better rate, notify your current insurance provider and let them know that you intend to jump ship unless they match or beat the rate being offered. Some companies will even give you a better deal if you get one of their plug-in devices that monitors your driving habits over a certain period of time. If you are a good driver, this can get you an even better rate sometimes than the best rate quoted by a company that does not offer this option.

How Does eSurance Stack Up Against the Competition

One of the newest entries into the insurance game is eSurance, and it seems that they are becoming a major competitor to other more well-known companies such as AllState, StateFarm, Traveler's, and Geico. I have never had insurance with any of these companies, but I have had occasion to compare prices recently between eSurance and my current provider. eSurance came in at $44.00 per month less than my current provider; however my current provider gave me the option to use one of their driving monitoring systems which could potentially reduce my rate by another $18.00 per month.

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Where to Look for Important Information Before You Start Shopping Around

Before you begin your quest for a better insurance rate, there are a few key things you should know.

  1. What is the financial strength of the companies you are considering?
  2. How do they rank for customer satisfaction?
  3. How easy is it to file a claim?
  4. What states do they operate in?
  5. If you file a claim, will you rates go up and by how much?

Although, price is an important consideration, it isn't the ONLY consideration. It's no point to shop a company that doesn't operate in the state you live in for certain. You also want to make sure that the company has the financial resources to pay a claim, should you have one. You will also want to know how you are going to be penalized if you file a claim. Some companies won't raise you rates if the claim is less than a certain dollar amount. I have not had any recent car insurance claims; however, I have had two recent home insurance claims for wind damage and hail damage to my house. My carrier raised my rates by $200.00 per year, and now I am shopping around for new homeowners insurance, but even though rates have been raised, so far I have not found anyone who will beat my current carrier's rate.

To find information that might be relevant for your search, a couple of good sources are A.M. Best and J.D. Powers. J.D. Powers gives ratings for customer satisfaction and A.M. Best rates companies based on their financial strength. The J.D. Powers rating is a ranking out of 5 stars, where 5 stars is the best. A.M. Best rates companies for financial strength such as A, AA, or AAA and credit ratings such as A, A+, and A++. When comparing Geico vs. eSurance both have a pretty strong rating for finacial strength, but neither one has a paricularyly impressive rating for customer satisfaction. If you can find a company that gives you a great rate, has a AAA finacial strength rating, and has an A++ credit rating, plus a 5 star customer satisfaction rating, then you've found your ideal match.

There are More Things Than Just Safe Driving That Can Save You Money

Of course being a safe driver will save you money on your insurance, but there are other things that can help you lower you rates too. Some of them are aftermarket additions that you can add to your car if it isn't already equipped with them. Nearly all modern cars now come equipped with air bags and seat belts, but you can also save money if you add anti-theft devices to your vehicles. Car alarms can also save you some money. Keeping your car parked in your garage, if you have one, can also save you some coin. If you drive less than a certain number of miles each day, you can get a rate for a pleasure vehicle, so if you live in an area where there is public transportation, you can not only save money on your auto insurance, you can also save gas money.

Quick List of Companies to Compare Prices

Where to Check Car Insurance Prices
State Farm
Liberty Mutual
This list is by no means all-inclusive, just some starting suggestions. There is no particular order in this list, nor is there any preference of one company over another.

Specialty Vehicle Insurance

Many people have specialty vehicles that require being insuranced just like a regular daily driver automobile. Not all insurance companies offer insurance for these vehicles, and even if the carrier you are getting the best overall deal from on your regular family car(s) does, they might not have the best deal on specialty vehicles. Various types of specialty vehicles that need insurance are:

  1. Collector Cars
  2. Motorcycles
  3. RVs
  4. Boats
  5. Trailers
  6. 5th Wheels


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    • pocono foothills profile image

      John Fisher 3 years ago from Easton, Pennsylvania

      Hi, Thanks for you comment. Maybe if more people did this every year, insurance companies would stop trying to rape the public with over prices coverage.

    • quildon profile image

      Angela Joseph 3 years ago from Florida

      This is an excellent article. I changed from a well-known insurance a couple years ago and got a much lower rate for the same coverage. I'm about to do the same for my home. Voted up and useful.

    • pocono foothills profile image

      John Fisher 3 years ago from Easton, Pennsylvania

      @Jimmy-"What about Teenage Mutant Ninja Turtles?"

    • profile image

      Jimmy 3 years ago

      I am a ninja. Ninjas don't need car insurance. It's in the constitution.

    • profile image

      Old Poolman 3 years ago

      Your correct, I did the generic thing and paid the price for my stupidity. It was interesting however to see just how wide the price range turned out to be. A real eye opener about how much insurance should cost.

    • pocono foothills profile image

      John Fisher 3 years ago from Easton, Pennsylvania

      That only holds true if you do a generic quote request. If you do an individual one from each company separately (I know that's more work), you won't get bombarded with all those emails.

    • profile image

      Old Poolman 3 years ago

      True, but if you do a rate request online you can expect dozens of emails requesting more information.

    • pocono foothills profile image

      John Fisher 3 years ago from Easton, Pennsylvania

      Thanks for the comments. Nowadays, you don't even need to talk to an insurance agent in most cases to compare rates. Everything can be done online for the most part.

    • profile image

      Memuna Umber 3 years ago

      Your article is very comprehensive, and useful!

    • Karen Ray profile image

      Karen Ray 3 years ago from Oklahoma

      Seems like those insurance carriers slowly raise the rates and most people just write a check and don't think to re-evaluate. They do it with property insurance as well as vehicle. Good hub to bring it to people's attention.

    • profile image

      Old Poolman 3 years ago

      Excellent advice and until recently I was guilty of not checking insurance rates. It was much easier to just write a check and mail it in than it was to have to talk to insurance agents.

      The last time I got my renewal notice I went shopping and was shocked to find that I could save a whole bunch of money by changing insurers. I now insure two vehicles with full coverage for $5 more than I was paying for one vehicle with the same coverage.

      I was a small business owner and was using an independent insurance agent to find me the best deal to cover all of my company vehicles and my personal vehicles. I was dumb enough to believe he shopped around and found me the best deal he could. But then I believe they get a percentage of the insurance premiums paid and it would not make sense for him to go with the lowest bidder.

      I also tried the plug-in devices that would save 10% after they had a years worth of driving history. Great idea in theory, but these devices would cause a dead battery in both vehicles if I didn't start them for a couple days. I had to take them out and am sending them back to the company that owns them.

      I am now with a big national insurance company but will again check rates when it comes time for renewal. They now cover all of my vehicles and my home so I believe they will be willing to listen if I find a cheaper rate for the same coverage.

      As you pointed out, just make sure you are getting the same coverage when you go shopping or the costs can be misleading.