How Often Should You Change or Shop for Auto Insurance?

*Updated December 2nd, 2025

Car insurance premiums have been rising fast. Over the past year, rates have increased by 12.7%, bringing the average annual cost of full-coverage auto insurance to $2,101 in 2025. Despite these rising costs, only 38% of drivers shop around for better rates. That means many people are likely overpaying for car insurance coverage simply by sticking with the same insurer.

If you haven’t reviewed your current policy recently, you might be paying more than necessary or missing out on discounts that other insurance companies or auto insurance providers offer.

A good rule of thumb is to review or switch car insurance at least once a year. However, major life events—like moving, buying a new car, or adding a driver—can mean it’s time to switch even sooner.

Why You Should Review Your Auto Insurance

Insurance companies adjust pricing based on risk, claim trends, and inflation. Even if your driving habits stay the same, your insurance premium can go up. Reviewing your auto insurance policy can help you:

Save money – Another auto insurer might offer the same coverage for less. Drivers who shop around save an average of $398 per year.

Find better coverage – Your needs may change over time. Your current insurer may not offer the right coverage you need for your vehicle or lifestyle.

Get new discounts – Car insurance companies often update their savings programs. Some insurers offer discounts for bundling home insurance, safe-driving programs, anti-theft devices, or telematics tracking.

Avoid overpaying – Many insurance companies are raising car insurance rates across the board. Some insurers, including Allstate, Liberty Mutual, and American Family, are expected to increase premiums by 7.5% in 2025.

When Should You Shop Around for Car Insurance?

Most auto insurance policies renew every six to twelve months, making that an ideal time to compare quotes. But you may want to shop around sooner if:

• Your premium increased unexpectedly

• You moved to a new state or ZIP code

• You bought a new car

• You added or removed a driver

• Your credit score improved

• You qualify for a discount your current insurer doesn’t offer

Shopping around for auto insurance at least once a year ensures you’re getting the best coverage at the best price.

Signs It’s Time to Switch Car Insurance Companies

There’s no set rule on how often to switch auto insurance, but certain situations make it smart to get quotes from at least three different insurance providers.

1. Your Rates Went Up

Car insurance rates are rising nationwide. The average annual premium is $1,547, but costs vary widely by state. If your premium jumped—without any accidents or tickets—it’s a strong reason to change car insurance companies. Rates can fluctuate based on regional claims, inflation, and insurer adjustments. Switching car insurance could help you find better rates.

2. You Moved to a New Area

Where you live greatly impacts auto insurance rates. Moving to a low-risk area could reduce your premium, while moving to a higher-risk ZIP code may make it worth comparing auto insurance companies for the best rate.

3. You Bought a New Car

New vehicles can raise or lower your insurance rate depending on safety features, repair costs, and theft risk. If you bought a new car, it’s a smart time to switch auto insurance or compare your current policy against other car insurance companies. Leased or financed cars often require more insurance coverage, and some drivers may need gap insurance.

4. You Added or Removed a Driver

Adding a teen driver usually increases your premium. Some insurance companies offer better discounts for young drivers, newlyweds, or households combining policies. If a driver moved out, removing them could reduce your premium.

5. You Changed Your Driving Habits

Driving fewer miles due to remote work or lifestyle changes may qualify you for a low-mileage discount. If you now drive significantly more, your risk level changes—and shopping for auto insurance can help you find the right rate.

6. Your Credit Score Improved

Many insurers use credit to determine car insurance premiums. If your credit improved, switching policies may save you money. Different insurance companies weigh credit scores differently.

7. You Qualify for New Discounts

Insurance providers regularly add or update savings opportunities. New insurance discounts may include:

• Bundling home and auto insurance

• Defensive driving courses

• Safe-driver programs

• Car-safety or anti-theft devices

• Rental car reimbursement benefits

If your current insurer doesn’t offer these, switching insurance companies could lower your rates.

When It Makes Sense to Stay With Your Current Insurer

Switching car insurance companies isn’t always the best move. Staying with your current insurer may be smart when:

1. You Have Loyalty Perks

Some auto insurance companies offer rewards like accident forgiveness, disappearing deductibles, or renewal discounts. If these benefits matter to you, staying may be more valuable than switching.

2. Your Rates Are Already Competitive

If you compare rates and your insurer is still offering the cheapest car insurance for your coverage needs, sticking with your current policy might be the best choice.

3. You Want to Avoid a Lapse in Coverage

Canceling your policy before securing a new one can result in a dangerous lapse in coverage, which may increase your insurance rate or even cause legal issues. This is why it’s essential to line up your new policy before canceling your old policy.

How to Compare and Switch Auto Insurance

If you want to switch your auto insurance, follow these steps for a smooth transition.

1. Get Multiple Quotes

Get quotes from at least three different insurance providers or use online comparison tools. Make sure each quote uses identical limits, deductibles, and coverage types so you’re comparing accurately.

2. Review Coverage Details

Price matters, but so does coverage. Compare liability limits, comprehensive and collision coverage, optional benefits, and any extras like rental car reimbursement or accident forgiveness.

3. Avoid a Lapse in Coverage

Start your new insurance policy before canceling your old insurance. Notify your lender if you have an auto loan. Turn off autopay to avoid double billing.

4. Check for Cancellation Fees

Some insurers may charge a cancellation fee if you switch car insurance companies before the end of the term. If you prepaid, ask about refunds for unused months.

Conclusion

With car insurance rates expected to rise by an average of 7.5% in 2025, reviewing your auto insurance regularly is more important than ever. Many drivers stick with the same insurance companies out of habit, but those who shop around often find better rates and better coverage.

If you’ve had a major life change, experienced rate increases, or discovered new discount opportunities, it may be time to switch auto insurance. Comparing quotes can help you get the right coverage at the best price.

Before switching car insurance companies, review coverage details carefully, avoid a gap in coverage, and check for cancellation fees. Taking these steps will help you make the switch smoothly and ensure you’re getting the best insurance for your needs.