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Many people buy car insurance and then never give their policy another thought unless they need to file a claim. However, you should always follow a few steps before you renew your car insurance policy with your current insurance company.
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Car insurance is a topic that you should always stay current with regarding new developments and offerings. With continual research and review, you can always find the most affordable prices.
Ways to Renew Your Policy
Once your car insurance policy has run its course, it is time to consider renewing. Each car insurance company has its own policies for renewing, and you will generally renew your policy once or twice a year.
One of the most important issues is to make sure that you have no lapse in coverage, as you will likely be charged higher rates for even a one-day lapse.
Some companies might require that you sign documentation either at an office or through the mail. Most companies that utilize websites and electronic payment options will allow you to renew your policy simply by making your payment. Remember that the first payment of your policy will likely be around 30% of your total premium.
If you signed up for automatic electronic withdrawal payments, your renewal payment would be automatically withdrawn from your bank account. This will happen unless you alert both your provider and your bank that you want to discontinue automatic payments. Such payment methods can take up to a month to be cancelled, so it is important to plan.
#1: Review Your Coverage Needs
Before you renew your current insurance policy, it is important to review your coverage needs. Your insurance needs are constantly changing, but your auto insurance policy will only change if you indicate that you want it to change.
You might find that you require additional coverage amounts. Perhaps you have recently added a teen driver, and you realize that you should increase your liability coverage and optional coverage amounts. Perhaps you have bought a home, and you want to find out if you can get a policy at the same provider to bundle policies and save.
Another occurrence that might require a change in your policy is if you have gotten married. You might need to add a driver, add a vehicle, change your name, or increase your coverage amounts.
You might also find upon reviewing your insurance policy that you need less coverage. Just make sure that if you reduce your coverage that you aren’t leaving yourself with too little coverage.
You should check how much your vehicle is worth to determine if it is cost effective to continue to carry collision and comprehensive coverage. You can find the fair market value of your car, from an Acura to a Volvo, on NADA Guides.
If your vehicle is worth less than $1,000, then you can consider dropping such optional coverage, according to the industry specialists at the National Association of Insurance Commissioners.
Additionally, you might be able to lower your coverage if you get health insurance coverage, if you have a teenage driver leaving your policy or if you have retired and will be driving a lot less. Again, make sure that you don’t put your finances in danger by lowering your coverage amounts too much.
#2: Look for Renewal Discounts
Another point that you should look for when considering renewing your car insurance policy is whether your car insurer will offer you a discount for renewing. Some companies offer customer loyalty discounts after your first renewal, while others require you to be a customer for a few years.
Find out when your customer loyalty discount kicks in, so that you aren’t switching insurance providers right before you qualify for the discount. Furthermore, some good driving discounts, such as those earned by GPS devices, might not start until you renew your policy.
#3: Compare Quotes
The last thing that you should always do before you renew your current car policy is to see if you can’t get a more affordable policy with another provider. You might have a three-year old accident or ticket that has fallen off your policy and you can find a less expensive policy with another provider.
Car insurance companies charge such different rates for coverage that it is always a smart idea to compare prices from many different providers. The experts at the Insurance Information Institute maintain that shopping around and comparing quotes is the best way to save on car insurance costs; they recommend that you get at least three quotes.
Comparing quotes for coverage is just as important when renewing as it was when you were first searching for car insurance. A quote for coverage also has no effect on your current coverage, but it is the only way to know how much any car insurance company will charge you for coverage.
How to Get Quotes
Getting quotes for car insurance coverage has never been easier. You can utilize all of the traditional methods. You can go to an insurance office to get a quote from an agent, or you can call a provider’s toll free phone number to speak with a representative.
The Internet has made getting car insurance rate quotes easier than ever. Most car insurance companies have a website that allows you to get a quote without leaving the comfort of your home. Furthermore, you can also use quote comparison websites such as this one to get multiple quotes with minimal effort. The comparison sites send your application to several different providers, and those providers return quotes to you.
When you get quotes, make sure that you first decide how much coverage you want. The Maine Bureau of Insurance advises in their Consumer Guide to Personal Car Insurance that the key to comparing quotes is to get quotes for exactly the same amounts of coverage. You can’t compare the cost of full coverage to liability coverage only because one provides more coverage than the other does. Make sure that you know how much liability insurance you want and your deductible amounts for collision and comprehensive.
Next, you need all of your pertinent information to fill out a car insurance application. This includes your driver’s license, your current policy, information about your vehicle, and information about other drivers. You will need to fill out applications concerning this data for every company that provides quotes. This is one area where quote comparison websites come in handy, as you only need to fill out the information once.
Furthermore, you also want to ensure that all of the information that you put on an application is accurate. Lying about information such as how many miles you drive, if you use your vehicle for business purposes, or where you park your vehicle in order to reduce your car insurance premium is much more serious than telling a little white lie.
Both insurance companies and state governments consider lying on a car insurance application to get lower rates as fraud.
You could lose your car insurance coverage or even face possible fine or jail time if your fraud is discovered.
Other Factors to Consider
Cost is not the only factor to consider when you are thinking about changing car insurance providers. Certainly, the cost of your policy should not be higher than necessary, but sometimes a higher price may mean that you are getting a superior product when it comes to car insurance.
You should also consider the customer service reputation of the companies you are considering switching to for coverage. Just as not all insurance rates are the same, not all auto insurance companies are the same. You want a provider who will be respectful, offer an array of packages, and employ knowledgeable and friendly staff. Look at ratings, reviews, and websites that offer unbiased reviews.
Additionally, you should also research the financial stability of any car insurance companies you are considering. Insurance is an important industry, and you rely on your provider to make you whole and protect your finances in the event of an accident or other loss. Unfortunately, car insurance providers can get into a financial crisis as any other business, and that threatens your security.
Ratings organizations such as Standard and Poor’s and Fitch Ratings monitor the financial health of companies such as insurance providers. These ratings organizations publish their findings as alphabetical ratings, allowing consumers and those in the industry to stay abreast of financial developments within an insurance company.
It is not a good idea to use any insurance company if they have a low financial rating from a ratings organization. A low rating indicates that the insurer is sliding towards bankruptcy, and they might not be able to pay your claim in the future. A lower rate is not worth it if it is with a company that has a poor financial rating.
If you find you can get a more affordable rate with an insurance company that has great customer service and strong financial ratings, then switching will be a smart move. However, you can also stick with your current insurance provider, as it is all up to you.
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