Why Should You Get Auto Insurance Quotes Every Year?

When your auto insurance is close to running out, your carrier will send you rates for the following insurance period. For example, they will tell you how much your insurance will cost for the next year.

While you might think it's easier to just renew your existing coverage, you should take time to get an insurance quote from other companies. Why should you shop around before you renew your auto insurance?

Insurance Companies Use Different Risk Data

If you ask a few insurance companies for an auto quote, you're likely to get a range of prices for the same coverage. While auto insurers use the same risk factors to set their rates, they don't all use these factors in the same way. For example, one carrier might class one risk factor as important, while others might not give this factor as much weight.

So, if one company has had a lot of auto claims in your neighborhood, then your address might be seen as higher risk. Your premiums will increase to compensate for the fact that you're more likely to claim on your coverage based on the number of incidents in your area.

However, if another insurance company hasn't had that many claims in your neighborhood, then your address won't be such a high risk. This carrier will charge you lower premiums because they see you as a lower risk.

If you get an insurance quote from different companies, then you are in a better position to find a carrier with the most competitive terms. Depending on their risk calculations, your current insurance company might not be the cheapest option.

Your Circumstances Might Have Changed

Your current insurance premiums are based on the information you gave your insurance company when you applied for coverage. Your policy renewal uses this data to work out your costs.

However, your circumstances might have changed since your policy started. It's a good idea to think about this every year when your policy expires. If things have changed for the better, then you could reduce your costs.

For example, you might have paid higher premiums in the past if you have a problem driving record or if you are a young driver. Your record might be cleaner now, and you'll be a year older. Some carriers will give you better rates for these changes.

Or, you might have changed the way you use your car. If you work from home more now in this post-pandemic world, then you might not drive as often as you did. Lower mileage numbers usually reduce premium rates.

If you get an insurance quote from various insurance companies, you could save money on your current quote. So, make sure to shop around and compare prices.