Most auto insurance policies renew every six months, which raises a common question: Should you shop around every time your policy renews?
You certainly can. But getting quotes every six months takes time, and sometimes the savings just aren’t that significant. If another company is only $50 cheaper for six months, is it really worth switching?
Then there’s the opposite situation. Your current company raises your rate a little at each renewal—maybe $30 here, $50 there. None of the increases seems big enough to leave over, but after a few years, you may be paying a lot more than you used to.
So how often should you actually switch? Zip insurance is here to give you the best approach.
1. Switching Every Six Months Can Backfire
It’s easy to treat auto insurance like any other purchase: compare prices and go with the cheapest option.
Insurance pricing, however, is a little more complicated.
In addition to factors like your vehicle, age, address, driving record and claims history, some insurance companies also look at your prior insurance history—including how long you’ve been with your current carrier.
A longer history with the same company may help you qualify for better rates with certain insurers. If you switch every six months, you may lose some of that advantage.
That doesn’t mean you should never switch. If another company is offering comparable coverage at a meaningfully lower price, switching can make perfect sense.
But changing carriers every six months to save $30 or $50? That may not pay off in the long run.
2. Don't Look at the New Quote in Isolation
Let’s say you currently pay $1,200 every six months, and your renewal comes in at $1,280.
You shop around and find another company offering the same or similar coverage for $1,220.
Technically, you can save $60 by switching. But before you do, it’s worth looking beyond that first six-month premium.
Insurance companies adjust their rates all the time. One insurance company may have very competitive pricing today because it’s actively trying to grow in a particular market. Six months or a year later, its pricing may look very different.
So you could leave your current company at $1,280, switch to the new company at $1,220, and then see that policy renew at $1,450 six months later—even though you didn’t have an accident or get a ticket.
Now you’re shopping again, only six months after your last switch.
This is why a 5% or 10% increase by itself isn’t necessarily a reason to change insurance companies.
What matters more is where your renewal price stands compared with the rest of the market.
If your current company has been relatively stable and the best alternative only saves you $50 over six months, staying put may be the better option.
3. Staying With the Same Company Forever Isn't a Great Strategy Either
Loyalty can be valuable, but that doesn’t mean you should stop comparing rates altogether.
Insurance companies change their rates constantly. Your own situation changes too—your vehicles, address, drivers in the household, driving history and other rating factors can all change over time.
The company that had the best rate for you three or five years ago may not be the most competitive company for you today.
And small renewal increases add up.
If your premium has gone up a little at every renewal and you haven’t compared rates in two or three years, it’s probably worth seeing what else is available.
You don’t have to switch. You just want to know whether the price you’re paying is still competitive.
4. So How Often Should You Shop Your Auto Insurance?
For most people, shopping around every one to two years is a reasonable rule of thumb.
That doesn’t mean you have to wait two years if something changes. If your renewal suddenly jumps by several hundred dollars, there’s nothing wrong with shopping immediately.
The important part is knowing the difference between shopping and switching.
Shopping regularly helps you understand whether your current rate is competitive. Switching should happen when the savings—or another benefit—are significant enough to make the move worthwhile.
If another company is only $40 or $50 cheaper for six months, there may not be much reason to move, especially if you’ve been happy with your current carrier.
But if you’re comparing similar coverage and another company can save you several hundred dollars every six months—or more than $1,000 a year—that’s a very different conversation.
Shop Regularly. Switch When It Makes Sense.
There’s nothing wrong with staying with the same insurance company when the price and coverage still make sense.
There’s also nothing wrong with switching when they don’t.
The key is to shop often enough to know what your options are, without chasing every slightly cheaper quote that comes along.
At Zip Insurance, we work with multiple insurance companies, so our job doesn’t stop after we help you buy a policy.
When your policy comes up for renewal, we can help compare your current rate with other available options. If your current company is still competitive, great. If another carrier offers similar coverage at a significantly better price, we’ll help you take a closer look.
You don't need to switch insurance companies every six months to save money. You just need to know when switching is actually worth it.
Contact Zip Insurance if you'd like us to compare your current auto insurance and see what options are available.
