6 signs it's time to switch your car insurance (2024)

It might be easy to treat car insurance with a "set it and forget it" mentality. You know the coverage is there, so why worry about changing it or shopping for a different insurance provider? However, there are plenty of times when switching your auto coverage can lower your premiums or get you coverage that better matches your needs.

CNBC Select lists six of the most common reasons you should reconsider your insurance, and walks you through how to switch insurance if you decide it's time for a change.

• You're trying to save money
• You're driving more (or less)
• Your family situation has changed
• You have bought a home
• You haven't shopped for car insurance in a while
• You're not happy with your insurance company
• How to switch car insurance
• Bottom line

If you've already trimmed the fun (but pricey) discretionary spending from your budget and still need to cut down on expenses, shopping for a new auto insurance policy might be a good idea.

According to a 2022 study by ValuePenguin, 26% of policyholders save $200 or more a year after moving their coverage to a new provider. Try calling a few insurance companies and gathering quotes — you may be able to find a good deal.

For those looking for the cheapest car insurance, CNBC Select recommends Geico, which offers some of the lowest rates, as well as 16 types of discounts. Auto-Owners Insurance can be a good option if you're looking for minimum coverage. The insurer offers highly affordable premiums, but it's only available in 26 states.

A big change in your driving habits means you may want to switch your auto coverage. For example, if you went from a daily 2-hour commute to the office to being fully remote, then the mileage you put on your vehicle every year will plummet. In this case, you might consider pay-per-mile insurance that allows you to pay a daily base rate plus a per-mile rate.

Just be mindful that with some providers, rates can fluctuate during the policy term. You can avoid this uncertainty by going with an insurance provider like SmartMiles by Nationwide, which keeps rates fixed for the term on their pay-per-mile policies.

If you've recently gotten married, you can add your spouse to your auto insurance policy to potentially receive a discount. Plus, insurers often require that married couples share their car insurance policies if they keep all of their cars at the same residence.

On the other hand, if you divorce your spouse you'll both need separate policies. In most states, divorce can also cause your premiums to increase.

Further, if you have a teenager who has started driving, adding them to your policy can be pricey since they don't have much driving experience. Luckily, some insurance providers offer discounts for young drivers. As an example, State Farm advertises a good student discount of up to 25% and a Drive Safe & Save app which can save you up to 30% and teach your teenager to drive safely.

Bundling your insurance can come with extra savings. For that reason, if you've recently bought a house and now need homeowners insurance, binding it with auto coverage could be a good move.

CNBC Select ranked Geico as the best company for auto and homeowners insurance bundles based on its low average premiums and wide range of insurance products from renters insurance to coverage for condos.

Maybe you haven't experienced any events that would prompt you to switch auto insurance — but it doesn't mean you shouldn't. If you have stuck with the same provider for years, switching might bring savings. Additionally, the more years you drive, the less risk there is of you filing a claim (according to the insurance companies), which should lower your premiums.

And if you're getting up there in the years, you'll find that some companies offer lower premiums to seniors, so it pays to get a few quotes.

Finally, there's little reason to stay with an insurer if you're not happy with the customer service you're getting. When it takes your insurance company a long time to respond to you or investigate your claim, or if they deny your claim without a valid reason, walking away may be the best choice.

When looking for your next car insurance provider, check ratings and reviews when gathering quotes. After all, low premiums aren't the only priority. You want to be sure that for the money you're paying, the insurer truly has your back.

Switching your car insurance is a relatively simple process. Here's what you'll need to do:

• Gather several quotes. Research your options and get a few quotes to find coverage that works best for you.
• Figure out the cancellation fees. Your current insurer might issue a refund for the remainder of prepaid premiums if you're terminating it early. However, many also charge early termination fees. If after canceling your policy, the refund and monthly savings don't offset the fees, you might want to wait until the end of the term and not renew.
• Purchase a new policy. It's best to buy a new policy while your current one is still in effect. You want your new policy to start on the same day the old policy ends. This way, you'll avoid a lapse in coverage.
• Cancel your current policy. Once you confirm your new policy is good to go, you can cancel the old one. Note that your insurer might require a 30-day notice for cancellation. Additionally, they might ask for documents such as a cancellation form or letter.

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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every auto insurance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best insurance.

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