The Advantages and Drawbacks of Comparing Several Car Insurance Quotes

Looking for auto insurance can feel about as appealing as scrubbing dirty grout. It is often easier to keep the policy you already have than to spend time comparing offers. Still, checking several car insurance quotes once a year or so can bring clear benefits.

One obvious reason is savings. Data suggests there is a real chance you can pay less by comparing quotes from different companies, although some drivers may already have the lowest available rate. That helps explain why more people are leaving some major insurers than are joining them. Shopping around can also turn up coverage that fits your current situation better. In addition, your insurer may have been quietly increasing your premium at renewal time. Looking at other companies can also be useful if you are unhappy with how your current carrier handles customer service or claims.

There are also downsides to getting multiple quotes. Contrary to a common belief, a credit score hit is not one of them. That is a myth. But if you enter your contact details on several websites, you may end up with a flood of spam calls and emails. The process can also take a lot of time, and if you are not careful, you could accidentally let your coverage lapse.

Pro – A short call can lower your car insurance bill

For most people, the main reason to shop around is simple: price. That is especially true when many drivers are already cutting back on insurance because of rising costs. In a Consumer Reports survey, 58% of people who switched from a previous provider said they left because another company offered better rates, while 41% said their old insurer raised prices.

The savings can be substantial. Among those who switched, the median annual decrease was $461. In fact, 41% said they saved at least $500, and 13% reported cutting their costs by $1,000 or more.

Consumer Reports suggests comparing rates every year or two, and that advice makes sense. The only way to know whether you are getting a competitive price is to check. Doing so may also uncover discounts you are missing. Rate comparisons are so important that California law requires the state to publish an annual report comparing insurance rates. The California Department of Insurance says people should shop for insurance the same way they shop for any other consumer product.

Con – The cheapest quote may not be the best deal

Suppose a comparison site shows five insurers, each with a price listed beside its name. It can be tempting to pick the lowest one immediately. Or maybe a competitor tells you it can beat your current premium by $20 a month. That may sound straightforward.

But price alone does not tell the full story. You also need to look at deductibles. A deductible is the amount you must pay before the insurer contributes to a claim. Deductibles can range from $100 to $2,000. So if you file a $2,500 claim and your deductible is $2,000, you would pay $2,000 yourself and the insurer would cover only $500. In other words, a policy with a slightly lower premium may not be worthwhile if the deductible is much higher.

You should also compare coverage limits. For example, state minimum liability coverage may not be enough if you damage an expensive vehicle. Sometimes paying more for a policy is the smarter choice.

Pro – You may find coverage that fits your life better

Cost matters, but it is not the only factor. It is worth checking whether your policy still matches your needs. For instance, do you rent cars a few times a year? Does your policy cover rental vehicles? You may have at least the minimum liability coverage required by your state, but does that protect you adequately if you hit a luxury car? Do not assume your existing policy is right for you. Reviewing the fine print may reveal coverage gaps, or even benefits you no longer need.

If you discover you are missing coverage you actually want, that does not necessarily mean your bill has to rise. Different insurers can offer very different coverage packages for similar premiums. You might be able to get rental coverage or higher liability limits from another company for the same amount you are paying now.

That is one reason some people prefer speaking with an agent or broker instead of relying only on online rate tools. A broker can hear your situation and build a plan tailored to you, without pushing you into paying for coverage you do not need.

Con – Comparing quotes can trigger a wave of telemarketing

This downside applies mostly to lead-generation websites that promise a fast quote. You know the type: instead of giving you a price right away, they ask you to submit personal information and then promise to email a quote later. The result can be a barrage of unwanted calls and emails. These sites often function as data farms, collecting contact information to sell to marketers and spammers, and the auto insurance industry is no exception.

Even comparison websites that display quotes online, such as Compare, Experian, and Insurify, may share or sell user data. Experian’s own disclosure says it does sell customer data. These sites may also compare only the insurers they have relationships with, so the quotes shown may not reflect every rate available.

Because of that, making direct phone calls may be the better approach. Many people do not use their phones much for calling anymore, but speaking with a real person can still be useful. If you want to save time, a broker who shops multiple companies for you may be the most efficient option.

Pro – Better service and claims support may be waiting elsewhere

If your current insurer makes it hard to reach customer service, that is worth noting. When you do get someone on the line, are they helpful, polite, and informed? Bad service is not the most common reason people switch, but it can matter a great deal if you have had poor experiences. There are sites such as TrustPilot that collect customer reviews of major insurers, so it can be smart to check what others are saying.

Claims handling is another important issue. Some insurers may gladly take premiums for years but become difficult when it is time to pay a claim. Your rates might even climb sharply after a single claim. Other companies offer accident forgiveness or avoid raising rates after one accident. You usually only learn those details by comparing options.

You can also look at complaint data through the National Association of Insurance Commissioners, which has a tool for checking consumer complaints against specific companies. Your state insurance department may offer something similar. Washington state’s comparison tool is one example.

Con – It takes time, and your coverage could briefly disappear

Most people are busy, so spending an afternoon shopping for car insurance is not exactly fun. But if you want the best rate, some effort is usually required. Online quotes often do not match the lowest prices you may get by calling directly, though there are ways to make the process easier.

Before making your first call, have your policy in front of you. It also helps to gather your driver’s license number and vehicle identification number. Think ahead about the questions you want to ask, rather than stopping at, “What is your best rate?” Ask about policy limits, deductibles, and what happens if another person drives your car. A broker who represents several insurers may be able to cover more ground for you.

Another risk is accidentally letting your insurance lapse. A new policy does not always begin the moment you hang up the phone. Make sure your new coverage has started before you cancel the old policy. Some people prefer to wait for written confirmation. In some cases, insurers can email a new insurance card with the effective date as soon as coverage begins.

Pro – Comparing quotes can help you avoid creeping renewal increases

It is a bit like forgetting to cancel a free trial and discovering a charge later. Many people let these things slide, and insurers know it. Around renewal time, some companies increase premiums slightly each year. The increase may seem small at first, but over time it can add up to a much higher bill. Insurers call this price optimization; others refer to it as a loyalty penalty.

That is why it is smart to compare quotes, especially as renewal approaches. Otherwise, you may assume the higher premium is just normal inflation. But if you check with another insurer, you may find the same or similar coverage for less.

That said, renewal increases are not always the result of greed. Inflation, climate-related losses, and rising accident rates can all push premiums up. And because companies calculate prices differently, your current insurer may already be giving you the best rate it can. That does not mean another insurer cannot do better.

So is shopping around worth the effort for you?