New car owners that are inquiring about insurance rates often have so many questions about the process. Most of their questions can be solved through a quick Google search. Some of the more subjective questions, however, prove to be more of an issue. One of the most puzzling questions to new car owners is: “How many car insurance companies do I have to shop at to get the best deal?”
A survey distributed in 2016 calculated that 21% of the respondents haven’t changed insurers in 6 to 10 years, while 8% haven’t changed companies in over 20 years. However, insurance experts believe that people should shop around for car insurance rates every 6 to 12 months to get the best rates. Due to changing economic circumstances, crime rates, and general insurance trends, looking into several new companies frequently could lower your costs.
Some people believe that comparing the prices of only the major insurance companies is the way to go. The thought process is: They’re the most successful companies nationwide; they must be the best. However, car insurance pricing is not a one-size-fits-all situation; rates can differ based on multiple factors, especially geographical location.
The more car insurance companies you speak with and research, the higher your chances of getting the best deal will be. A 2016 ValuePenguin article emphasized this, citing 6 to 10 as the target range of companies to look into for the best quote. A NerdWallet study found that U.S. drivers can save an average of $859 annually by looking into different insurance companies. According to the same study, 38% of customers have never matched car insurance quotes; this is a substantial amount of people not taking advantage of lowering their own expenses.
Don’t just check in with the big companies.
Oftentimes, people looking for good deals on their car insurance only think to go to the major 4 insurance companies, State Farm, Geico, Allstate, and Progressive. Believe it or not, some small, local companies might have better deals than their larger counterparts. In some states, a small insurance company might offer you rates that are hundreds of dollars less than what some of the major insurance groups might offer. For example, Grange Insurance has the lowest rates for good drivers in Ohio (at $559/year in comparison to State Farm’s $891/year quote), while Erie Insurance has the lowest costs for good drivers in Pennsylvania (at $712/year in comparison to Nationwide’s $1029/year estimation).
The magic number is…
Since insurance is a somewhat tailored experience, speaking with both local and nationwide companies is essential to getting the best rate. It is universally acknowledged that people should check at least 6 to 10 companies in their city to get the best deal. Since their odds of getting the best deal go up with the more companies they contact, making a goal of contacting at least 6 groups will raise your chances of getting the best deal for your area.
Nobody wants to spend a substantial amount of time on the phone talking about their insurance rates. However, this time spent on the phone could be worth the hundreds – or even thousands – of dollars you could be saving with a lower rate.