Why You Should Reshop Your Auto Insurance
A new study finds that drivers could save a lot by comparing rates from several insurers.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter
There’s a good chance you’re paying too much for auto insurance. A new study by NerdWallet found that American drivers are overpaying an average of $368 a year to insure their vehicles because they don’t shop around for the lowest rates.
Only 12% of drivers surveyed by NerdWallet -- a site with price-comparison tools for dozens of financial products -- said they find car insurance shopping easy. Because most people find the process to be time-consuming and difficult , they go with the first or second rate quote they get, says Maxime Rieman, product manager for the NerdWallet insurance team. By taking the time to comparison shop, though, drivers are more likely to find substantial savings.
NerdWallet analyzed auto insurance quotes for 1,000 zip codes across the U.S. and found that rates for comparable drivers varied by 154%, on average, within any given zip code. For example, rates for a 40-year-old married male with a clean driving record ranged from $993 to $2,338 in New York. In Texas, rates ranged from $1,067 to $3,133. In California, they ranged from $753 to $1,534.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Rieman recommends reshopping your auto insurance once a year to get a sense of rates and to find out if you can get a better deal from another insurer. NerdWallet has an auto insurance comparison tool (opens in new tab) that approximates rates from several insurers based on key factors, such as your gender, where you live and what type of car you drive. It’s a quick way to get quote estimates without entering a lot of personal information.
For more accurate quotes, you can use insurance comparison sites such as InsWeb (opens in new tab) and Insurance.com (opens in new tab), but you’ll have to provide more detailed information (see How to Get Accurate Car Insurance Quotes). You also can use TrustedChoice.com (opens in new tab) to find a local independent agent who can shop for you.
You also should reshop your auto insurance for any of these reasons:
You have a minor traffic violation. Speeding tickets and accidents can impact insurance premiums. So if your insurer hikes your rate after you get in a fender bender, Rieman recommends shopping around. You might find a lower rate from another insurance that doesn’t place much of an emphasis on minor traffic violations.
Your zip code changes. If you move -- even to a neighboring city -- you might find rates are lower in your new zip code, Rieman says. See Car Insurance Rates: Location, Location, Location.
Your teenager starts driving. Your auto premiums likely will rise when your teen starts driving. But it is generally cheaper to add your teenagers to your auto policy than for them to purchase their own coverage, according to the Insurance Information Institute. You might find, though, that another insurer offers a better deal for families with teenage drivers than your current insurer does. (Learn more about cutting costs for teenage drivers.)
Award-winning journalist, speaker, family finance expert, and author of Mom and Dad, We Need to Talk.
Cameron Huddleston wrote the daily "Kip Tips" column for Kiplinger.com. She joined Kiplinger in 2001 after graduating from American University with an MA in economic journalism.
-
-
Stock Market Today: Stock Market Struggles While Alibaba Shines
Tech and communication services stocks were two of the worst performers today as Treasury yields rose.
By Karee Venema • Published
-
Study Reveals the Most Trusted Banks
A recent study reveals the top 15 most trusted banks, with one bank ranking as the most trusted for the third consecutive year.
By Erin Bendig • Published
-
How to Appeal an Unexpected Medical Bill
health insurance You may receive a bill because your insurance company denied a claim—but that doesn’t mean you have to pay it.
By Rivan V. Stinson • Published
-
Amazon Prime Fees Are Rising. Here’s How to Cancel Your Amazon Prime Membership
Amazon Prime Amazon Prime will soon cost $139 a year, $180 for those who pay monthly. If you’re a subscriber, maybe it’s time to rethink your relationship. Here’s a step-by-step guide to canceling Prime.
By Bob Niedt • Last updated
-
How to Haggle for Almost Anything
Smart Buying These strategies will help you negotiate a better price for just about any product or service.
By Katherine Reynolds Lewis • Published
-
Disability Insurance Can Provide COVID Coverage
Coronavirus and Your Money If you are concerned about long-term complications from COVID-19, consider disability insurance coverage.
By Rivan V. Stinson • Published
-
19 Things You Can't Return to Amazon
Amazon Prime Before tossing these items into your virtual shopping cart, be sure to read Amazon's return policy first.
By Bob Niedt • Published
-
How to Avoid a Charity Scam
personal finance Scammers never quit, even when you're trying to be altruistic. But you can avoid getting duped if you do your homework.
By Rivan V. Stinson • Published
-
Where to Find the Best Mother's Day Gift Deals and Free Shipping Offers
Smart Buying Get an early start on your Mother's Day shopping so shipping delays don't thwart your best intentions.
By Andrea Browne Taylor • Last updated
-
Coronavirus Car Insurance Rebates for the Road Less Traveled
insurance People are driving less, and that means big auto insurance companies such as State Farm, Allstate and Geico are giving coronavirus-related rebates.
By Emma Patch • Published