Dave Ramsey recommends shopping for new car insurance in these 6 situations

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Don’t assume that sticking with the status quo on your car insurance is always the right move.

Key points

  • Shopping for new car insurance can make it possible to reduce premium prices.
  • It may also be important to shop around for new insurance to maintain the correct coverages as a driver’s circumstances change.
  • There are six life changes after which financial expert Dave Ramsey recommends shopping for new insurance.

Buying car insurance is important to protect against loss of assets and to comply with the law. But while drivers may assume they can buy coverage once and never think about it again, that’s simply not the case. In fact, it’s important to shop around for coverage periodically.

Specifically, there are six situations where financial expert Dave Ramsey believes drivers should shop around to see if it makes sense to switch insurance. Here’s what they are.

Six situations to look for new auto insurance coverage

Ramsey suggests shopping and comparing auto insurance policies under the following six circumstances:

  1. After moving
  2. After purchasing a new vehicle
  3. After he got married
  4. After he got divorced
  5. After adding a teen driver to a policy
  6. After a loved one who was on the policy died

There’s an important reason Ramsey suggests these life events should prompt a comparison of insurance options. “Sometimes major life events affect your premiums — and the company that used to give you the best deal no longer does,” Ramsey explained.

How to shop for new insurance

While it may seem like a hassle to add shopping for auto insurance to your to-do list after you’ve experienced a major life change like a move or divorce, the reality is that it’s pretty easy to check out the options available.

Consumers shopping for a policy can check what their current coverage is to make sure it’s sufficient and that no additional protection is needed. “Double-checking your current policy now will help you know what to look for when you start shopping for a new one,” Ramsey explained. “After all, it’s kind of hard to shop for something when you don’t even know what you need.”

After checking current coverage, drivers should consider what types of asset protection they need and whether they should add additional types of auto insurance, such as collision coverage or more liability coverage. Ramsey recommends having at least $500,000 in liability protection, although state-required minimums are much lower.

Armed with information about what types of insurance to buy, consumers can compare quotes from multiple insurers online fairly quickly. It’s easiest to do this using the vehicle’s VIN number, as insurers can automatically look up a lot of information about the vehicle when drivers provide this identification number. Drivers shopping for coverage should also have details of their own accident history as well as the driving history of others who will be covered by the policy.

After receiving coverage quotes from about six to 10 insurers, drivers can decide which company will provide all the coverage they need at the time for the best possible premium price.

Some motorists will find it’s a different insurer than before if they compare cover after the major life events Ramsay mentions, while others may find that staying with their existing insurer makes sense after all. The only way to know if a change is necessary due to changing life circumstances is to do the process of comparison shopping to explore all the available options.

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