Car Insurance: Renew or Buy New?

If you're like most drivers, you probably think your car insurance premiums cost too much; it's no secret that paying a monthly premium can eat away at your budget. Luckily, you have the opportunity to renew car insurance coverage OR purchase a new policy every year.

Evaluate your options a couple of months before your car insurance policy expires to determine if it's better to renew your coverage or to seek a new carrier.

Renewing Your Car Insurance Policy

If you happen to have the ideal auto insurance policy, there is no reason to shop around for a different carrier. However, the likelihood of this being the case is slim to none.

You might want to renew your policy if it's still relatively new AND you did your due diligence before you had originally purchased it. Chances are if not much has significantly changed since you first purchased your car insurance, and your policy was the best you could find before, it's probably still among the best you can find come this renewal period.

Shopping for New Car Insurance

Big Changes

However, if something has significantly changed since you purchased your car insurance policy, you might want to consider shopping around for a new policy.

Big changes that can affect your car insurance rates include:

  • Moving.
  • Getting married.
  • Buying a new car.
  • Adding a teenager to your policy.

Passing of Time

If it has been some time (especially around 3 years) since you last shopped for car insurance, you really should consider shopping around for a new policy.

This is especially true if you haven't been in any accidents or you haven't received a traffic ticket in the past 3 years. You may be eligible for some savings you didn't know about the last time you shopped for car insurance.

If your car is older and/or you finished paying off your car, you might want to consider reducing the coverage of your policy, and the price of your policy, by removing collision and comprehensive coverages. If you still want these safety nets, you can instead save a little by increasing your deductible – the amount of a claim you are responsible for.

Resist Getting Attached to a Particular Insurance Company

Attachment is not necessarily an evil emotion. However, it is easy to become too attached to things like certain auto insurance carriers. This often happens because it is easier to renew car insurance coverage than to research and buy a new policy. When you opt to buy car insurance with a different agency, you will need to fill out the paperwork all over again.

A Minor Hassle May Yield Favorable Results

Even though switching coverage involves a very minor hassle, it is worth the trouble if you end up paying less money for your premiums and your coverage improves. Perhaps you are attached to your current policy for all the right reasons. If so, count yourself lucky. However, if your attachment stems from a reluctance to make a change, you need to reconsider all your options.