Here's When Dave Ramsey Says You Should Shop for New Auto Insurance

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  • Drivers are typically required to have auto insurance.
  • Motorists shouldn't necessarily stick with the same company.
  • Dave Ramsey highlights a few key situations when consumers should shop around for new coverage, like when they buy a new vehicle.

Shopping around for auto insurance can really pay off.

Every driver needs to have at least the required minimum amount of auto insurance their state mandates. Most people should have more coverage in order to better protect their assets and avoid potentially devastating financial loss -- in the event a collision occurs or something happens to their vehicle.

While auto insurance is important, it can be expensive and strain a household budget -- especially for drivers who buy substantial coverage to ensure full protection of their assets. The good news is, it's possible to save by shopping around among insurers. This is something every driver should do periodically to make sure they have the right protection at a fair price.

But when exactly should motorists shop for new coverage? Personal finance expert Dave Ramsey has provided some suggestions on when it's a good idea to get new insurance quotes and make sure auto insurance policies are as affordable as possible.

Here's when Dave Ramsey thinks drivers should get new insurance quotes

On his blog, Ramsey highlighted a number of different situations when he believes it is a good idea for motorists to get quotes from insurers to compare their coverage options. These situations include:

  • When a driver moves to a new location
  • After a motorist has purchased a new car
  • When a driver's marital status changes, either because of a new marriage or a divorce
  • After a teen driver is added to an insurance policy
  • After a loved one who was on the policy passes away or moves out of the home and gets their own coverage

Why does Ramsey advise shopping around in these particular situations? The reason is simple. These are all major lifestyle changes. And insurers price a person's policy based on the risks presented by their current lifestyle.

Adding or subtracting motorists from a policy, moving to a new place, or changing family statuses can all affect the level of risk a policyholder presents to an insurer. As a result, a driver's current company may not provide the best price for a driver whose situation has changed -- even if that company offered the fairest price under the motorist's old circumstances.

Should drivers listen to Dave Ramsey?

Ramsey's advice is spot on when it comes to recommending motorists shop around after they have experienced a lifestyle change. But outside of these circumstances, it's also a good idea to comparison shop for insurance quotes at least once per year.

The insurance market can change over time, with new insurers coming into the market and existing companies changing their pricing structure to be more (or less) competitive. Unless a motorist gets regular quotes around once per year, the driver may not be aware that coverage is costing more than necessary -- and there's no reason to pay more for protection as long as any insurance company a motorist considers has a good reputation for customer service.

Ramsey also provides some advice about the two circumstances where drivers should actually change their coverage -- not just shop around to explore options. He advises making a change either when a driver can get a better price or when a current company is providing poor customer service.

He's exactly correct. Any motorist who is overpaying or who is dissatisfied with the way they're being treated as a customer should definitely find a new insurer since there are so many great options out there.

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