Should You Switch Auto Insurance Each Year?

Many people look each year for ways to save money on their auto insurance. In some cases, they may try to get ahead of the curve by switching their auto insurance provider every year. Unfortunately, this could actually hurt your rates rather than help them. 

Rates Don’t Always Go Up by Year 

Your car insurance rates won’t automatically go up every year. Instead, they may fluctuate depending on different influencing factors—such as an accident. If you have a new accident on your record, you could see an immediate leap in your car insurance rates. On the other hand, if an accident leaves your record, you could see a drop in your car insurance rates. 

For example, say you get into an accident and it lasts on your record for five years. At the end of these five years, once the accident drops off your driving record, you could see a related drop in your car insurance rates. 

Switching Too Often Can be a Red Flag 

Each time you switch auto insurance policies, you run the risk of paying more. This is because when you switch auto insurers too often, insurance providers begin to question the validity of your policy or how high a risk you are to insure. Auto insurance rates can also fluctuate depending on the market and the times, so switching auto insurance one year can mean you’re paying much higher rates than before. 

You May Lose Discounts 

In some cases, you could lose discounts that are helping you save money if you leave your insurer. This particularly applies if you have a home and auto bundle or a loyalty discount. Insuring with another insurance provider means you will have to start over and may no longer qualify for the discounts you used to. 

Switching After an Accident is a Bad Idea 

As a rule of thumb, you don’t want to switch your auto insurance directly after an accident. This is because the accident does not follow your insurance policy but your driving record. If you switch your insurance provider because your rates went up after an accident, the influence of the accident will still affect the quotes you receive from different insurers. 

Your current insurer may be willing to work with you to find discounts and other ways to save money after an accident.  

Speak with your insurance agent before making changes to your car insurance policy. There are valid reasons you may want to switch insurers, so keep in mind the timing of the switch and how frequently you do so.