Dave Ramsey Recommends Buying New Car Insurance In These 6 Situations

Image source: Getty Images

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


Key points

  • Purchasing new car insurance could lower the price of premiums.
  • It may also be important to shop around for new insurance to maintain the right coverages as the driver’s situation changes.
  • There are six life changes, after which finance expert Dave Ramsey recommends getting new insurance.

Purchasing auto insurance is important to protect against asset loss and to comply with the law. But while motorists may assume they can buy coverage once and never think about it again, that’s simply not the case. In fact, it is important to walk around the cover periodically.

Specifically, there are six situations where financial expert Dave Ramsey thinks motorists should shop around to see if it makes sense to switch insurance. Here is what they are.

Six situations for looking for new car insurance coverage

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

  1. After moving
  2. After buying a new vehicle
  3. After getting married
  4. After getting divorced
  5. After adding a teen driver to a policy
  6. After the death of a loved one who was insured

There’s an important reason why Ramsey suggests these life events should trigger 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 buy new insurance

While it may seem like a hassle to add buying car insurance to your to-do list after going through a major life change like moving house or divorce, the reality is that it’s quite easy to check the available options.

Consumers purchasing a policy can check their current coverage to ensure it is sufficient and no additional protection is needed. “Rechecking 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 buy 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 to add other types of auto insurance, such as collision or additional liability coverage. Ramsey recommends having at least $500,000 in liability protection, although the state minimums are much lower.

Armed with information on what types of insurance to buy, consumers can compare quotes from multiple insurers online fairly quickly. It’s easier to do this using a car’s VIN number, because insurers can automatically look up a lot of vehicle information when drivers provide this ID number. Drivers seeking coverage must also have details of their own accident history as well as the driving history of other people who will be covered by the policy.

After obtaining coverage quotes from approximately six to 10 insurers, motorists can decide which company will provide all the coverage currently needed at the best possible premium price.

Some motorists will find it to be a different insurer than before if they compare coverage after the major life events mentioned by Ramsey, while others may find that sticking to 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 price comparison process to explore all available options.

The Best Car Insurance Companies in Ascent for 2022

Ready to shop for car insurance? Whether you focus on price, claims handling, or customer service, we’ve researched insurers nationwide to bring you our top picks for car insurance coverage. Read our free expert opinion today to start.