Every Driver Should Be Shopping for Car Insurance Now. Here's Why

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Drivers who haven't compared car insurance costs yet this year should do so now. The start of a new year is a good time to take a look at current bills and try to find ways to bring costs down.

Shopping around for car insurance is a great way to do that for a few key reasons. Here are three big reasons why shopping for car insurance coverage at the start of a new year is a good idea for every motorist.

1. New car insurance options may be available

The car insurance market is not stagnant. New insurers come on the market, and existing insurers may start to offer different products.

Shopping around is important to see what's out there because there may be a new company or type of coverage that is a better fit. Unless drivers shop around and find out what car insurance options are available to them, they may never know that they are lacking an important type of coverage or that another insurer would be a better fit for their needs.

2. Circumstance changes may mean a different insurer is cheaper

Drivers who have shopped around before buying coverage initially may feel confident they have the cheapest insurer for their situation. But situations change. Marriage, divorce, kids getting older, a job change, or simple aging can change a policyholder's risk profile.

More: Check out our picks for best car insurance companies

As these life changes happen, it becomes possible that a different auto insurance company may offer more affordable coverage to a particular driver. This is true even if that motorist has had the same insurance for many years.

Since drivers price risk differently and take into account lots of lifestyle factors, it's worth checking out different price quotes each year. That way, each driver can make sure the coverage they currently have is the best price for the best coverage based on their current situation.

3. Auto insurers tend to penalize people who don't shop around

Many drivers assume their insurer will reward loyalty. But that's not necessarily the case. In fact, the opposite could actually be true. Some insurers use a strategy called price optimization. This strategy takes factors other than accident risk into account. And one of those factors is whether the insurer believes the policyholder is likely to shop around for other coverage options.

That's right -- if an insurer doesn't think a policyholder will compare options, it will actually charge them a higher premium. This is reason enough to take a few minutes and check out what other kinds of coverage are out there.

The bottom line is, it's really simple and easy to compare car insurance prices online and to make a switch if a different insurer is cheaper. The beginning of a new year is a perfect time to do that, because then drivers can remember to go through this process every year.

So, any driver who hasn't yet shopped for coverage in 2023 should do that now and then make it a habit to check out options at the start of every year.

Our best car insurance companies for 2022

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we've researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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