Millennials Are More Likely to Make This Smart Move With Their Auto Insurance

If you have a car, you need auto insurance. It's an important financial protection, but it's also one that has been getting much more expensive. The cost of car insurance went up by 20.6% in 2023, according to the U.S. Bureau of Labor Statistics.

But there are ways you can put your insurance premiums in reverse. One of the best options is also one of the most underutilized: shopping around for a new policy. Most drivers don't do this often, but millennial drivers are the exception.

Millennials shop around for car insurance more than any other generation

It's a good idea to shop around for car insurance at least once a year. Only 26% of drivers do this, according to a recent car insurance survey by The Motley Fool Ascent. More than half (52%) say that they do it rarely or never.

Millennials are far more likely to compare their insurance options regularly. More than 4 in 10 (42%) said they shop for car insurance annually, and another 21% said they do so every two or three years. Here's how many people in other generations said they shop for car insurance every year:

• Generation Z: 19%
• Generation X: 24%
• Baby boomers: 19%

The importance of rate shopping

When it comes to car insurance, loyalty doesn't pay. In fact, it often works against you. In many states, car insurance companies are allowed to conduct price optimization. If they don't expect you to comparison shop, based on the data they have about you, then they may charge you higher rates.

Even if you live in a state that doesn't allow price optimization, it's still smart to shop around for insurance every year. That's the only way to know if you're getting the best car insurance rates.

Most drivers who switch insurance carriers are likely to save at least some money, according to research by the Office of Public Insurance Counsel (OPIC) in Texas. Those who have been with the same carrier the longest tend to save the most. OPIC also found that drivers who had been with their carriers for eight years could save 19% by switching.

You also have nothing to lose. If your current policy turns out to be the best deal, you can keep it. You won't have to worry about paying a higher rate due to price optimization, either, as your carrier will know that you're the type to shop around.

How to shop for a new auto insurance policy

There are a few ways to get car insurance quotes. The most convenient option is a car insurance comparison tool. You provide some basic information, including your age, location, and details about your car. Then you'll see quotes from different auto insurance providers.

That's a good way to quickly pull up quotes from lots of companies. You could also pick out a few car insurance companies you're interested in, and then go to their websites for quotes. This can work well if you're looking for a specific type of car insurance, such as:

• High-risk car insurance
• Car insurance for military and veterans
• Car insurance for young drivers
• Car insurance for drivers with poor credit

With online car insurance quotes, you can rate shop in a matter of minutes. Make sure to do this at least once a year to look for opportunities to save.

You should also do this after any life events that could impact your insurance rates. For example, if you recently improved your credit score, you may qualify for lower premiums. The same is true if you switched to remote work and aren't driving as much. By rate shopping after big life events, you can ensure you're not overpaying and that you have the coverage you need.