If you own a car, you’re probably sick of paying for car insurance. While car insurance may protect you and your property from financial loss if you opt for the right coverage, most people don’t see the benefit on a day to day basis.
Instead, they just see a monthly bill or a bill that comes twice per year. Thankfully, you may be able to save money on your car insurance by shopping around and switching to a different car insurance company.
Our top car insurance picks
|Car Insurance||Best For|
|Liberty Mutual||Customer support|
|Geico||First-time car insurance buyers|
Price comparisons of major car insurance companies
While each individual person’s insurance situation will be unique, we wanted to share an example of getting price quotes from five common auto insurers. For each quote, we used as similar circumstance as possible to get apples to apples comparisons on pricing.
Our quotes below are for a single 25-year-old male accountant with a bachelor’s degree.
They spent three years with their prior insurance company, Nationwide, got their license at 16 and only own a financed 2015 Honda Accord LX 4-door sedan. The person drives 12,000 miles per year.
All quotes are for as similar coverages as each company’s quotes allow and are for the same state and address.
The quote process is pretty simple for the five insurers below. They typically ask for your zip code or address up front to see if they offer coverage in your area.
Then, you have to fill out information including your name, birthdate, and the car you want to be insured. In addition, you’ll have to provide other information such as your education, how many miles you drive per year and whether you’ve been in any accidents or received tickets within the last three to five years.
Once you fill out all of the information, the insurer will give you a quote for their insurance. At that point, you can change the coverages offered to match the coverages you want to compare to other quotes.
Five major insurers cost based on the pre-constructed profile:
- Metromile: $213.30 per month
- Liberty Mutual: $204 per month
- Esurance: $130.45 per month
- Allstate: $115 per month
- Geico: $83.65 per month
You don’t have to limit your car insurance search to the five major car insurance companies listed above. There are plenty of other companies that may provide even better pricing for your particular situation.
For instance, USAA often offers amazing car insurance rates for military members and their families.
To give you a better sense of what each company above has to over, here’s a table comparing them:
|Discounts||None, but you only pay per-mile||- Affinity discounts |
|- Good driver |
- Online quote discount
- Switch and Save®
- TeenSMART discount
- Defensive driver
- And many many more
- Good driver
- Defensive driver
- Good student
|Customer Service||By phone 6am-6pm PT, Monday - Friday||You can call a representative, but they make their site easy enough to use that you shouldn't have too many questions||- By phone 6 am - 12 am CT, 7 days a week||They have offices all over the US so you can speak with an in-person representative||- By chat 24/7
- In-person offices around the US
- By phone
|Review||Metromile review||Liberty Mutual review||Esurance review||Allstate review||Geico review|
How much money can you save by switching car insurance companies?
Believe it or not, your car insurance company may not be giving you the best rates around, especially if you’ve been with the same company for a long time.
In some cases, you could save hundreds of dollars per year by shopping around and switching to a different car insurance company.
GEICO’s ads claim you can save 15% or more on car insurance in 15 minutes, while other companies claim they can save you money even faster.
Ultimately, the amount you can save depends on your unique situation. You’ll need to get quotes for your specific situation to find out how much you can save.
Why should you switch car insurance companies?
To save money
Usually, people look to switch car insurance companies to save money. Different car insurance companies calculate their rates in different ways.
One car insurance company may offer certain drivers better rates while others may offer better rates on a particular make and model of car. The formulas used to determine rates are extremely complex and vary from company to company. As your life and your cars change, you may qualify for a better rate elsewhere.
One way to save money is by paying for car insurance by the mile, especially if you do not drive a lot or only drive only during certain times of the year. Metromile is a pay-per-mile insurer and offers car insurance in the following states: Washington, California, Oregon, Virginia, Pennsylvania, Illinois, New Jersey, and Arizona.
Your life circumstances have changed
Your life circumstances may have changed and now allow you to switch to another company that you previously wouldn’t qualify for.
Another common reason to switch car insurance companies is moving. Your old car insurance company may not offer car insurance in your new location forcing you to switch.
Who can benefit most by switching car insurance companies?
Due to the large number of insurance companies that each have their own pricing formulas, it’s impossible to tell you who stands to save the most by switching car insurance companies.
Anyone who has had a major life event
The good news is, there are a ton of insurance companies out there so there’s always a chance you can get a better rate by switching.
In general, major life changes such as getting married, purchasing a home, or purchasing a new to you car can play a big factor in your insurance prices.
Those who make a lot of claims
There are also negative events that can compel you to change insurance companies to find better rates. If you cause a serious accident, get traffic citations, or make claims on a regular basis, you may find a different company offers better rates than your current company.
You should get a quote each time you have a significant life change, have a negative event added to your driving record or once a year to see if you can save.
Who shouldn’t switch car insurance companies?
Those who are happy with their insurance provider
While many people may benefit by switching car insurance companies, you may not want to switch. If you’re happy with your current insurance company and you can’t get a better price elsewhere, there isn’t a good reason to switch car insurance companies if you don’t have to.
Those who’ve been in an accident recently
You may find it’s better to stick with your current car insurance company if you’ve recently been in an accident or had some other negative penalty on your driving history.
In many cases, your current insurer may continue to offer the best rates. However, not all insurance companies treat negative events in the same way so it’s still a smart idea to shop around to make sure you’re still getting the best price.
When is the best time to switch?
The best time to switch car insurance companies is when your current policy expires. This way, you won’t have to pay any cancellation penalties if your current auto insurance company has them.
You do need to switch carefully though. Get quotes ahead of time and make sure you don’t have any lapses in coverage. You can overlap the policies by a couple of days to make sure you stay covered, but if you set up your policies right you don’t have to do this.
What to know about switching insurance companies
When switching car insurance companies, you should carefully investigate the coverage offered both by your new and old policy.
Make sure you’re making an apples to apples comparison if you’re switching based on cost.
A lower price doesn’t always equal the same coverage
Companies can offer you lower amounts of insurance in an attempt to give you a lower price, but you won’t have the same amount of coverage and could be left in a bind should you need that coverage.
Look out for cancellation penalties on your current insurance, too. If there is a large cancellation penalty, it may make sense to wait until your current policy expires to switch.
Make sure the insurance company is reputable
Price isn’t the only factor you should consider when switching car insurance companies. Make sure to look at the financial strength of the insurer and the insurer’s customer service record.
In particular, look at reviews from customers that have made claims to see if the company offers reasonable payouts and are easy to deal with should you be in the stressful position of having to make a claim.
Pros and cons of switching car insurance companies
Switching car insurance companies can be beneficial when you get a better price or better customer service. Saving money can allow you to purchase more coverage if you need it. Alternatively, you can use your savings to pay down debt or work toward another financial goal.
Switching car insurance companies can result in cancellation charges. These charges may be worth paying if you’re saving enough money, but they’re annoying and make switching a more tedious task.
You’ll also be dealing with a new company. While you may get better customer service, the process of switching can be frustrating for those that don’t understand insurance jargon.
You’ll have to deal with setting up new automatic payments and other hassles that commonly pop up with doing business with a company for the first time.
You may think you’re already getting the best rate possible on your car insurance. I’ve been in that exact situation myself. However, after a few phone calls and insurance quotes, I quickly found out I could get a better deal elsewhere.
Don’t fall into the same trap I did. Get new car insurance quotes today to make sure you’re getting the best rates. It only takes a few minutes and could save you hundreds of dollars per year.