I got a call last week from a frustrated client, let’s call her Margaret.
"Rich, my homeowner’s insurance just went up $400 this year, and I’m mad. Should I shop around?"
It’s a question I hear all the time. And the truth is, the answer isn’t always simple. Over my 23 years as a financial professional, I’ve seen clients save money by switching- and others make costly mistakes.
The truth is, there's a right time to shop for insurance - and there's an absolute wrong time. Let me walk you through both, so you can make smart decisions about your coverage.
Four Smart Reasons to Shop for New Insurance
1. Your Premium Increased Significantly
Not every premium increase is worth the hassle of switching. A $400 increase might sting, but the real question is: does it impact your overall financial health?
- If the increase forces you to cut back on essentials, shop around.
- If it’s just an annoyance, it may not be worth the effort.
The most financially successful clients focus on big-picture decisions, not minor cost increases.
2. You’re Experiencing Poor Customer Service
Last month, another client spent three hours on hold trying to ask a simple question about her policy. Three hours! That's not customer service - that's customer punishment.
If you're stuck in endless phone menus, dealing with unanswered emails, or working with an agent who seems to have disappeared, that's a legitimate reason to look elsewhere. Your insurance company should be there when you need them, not playing hide and seek.
If you’re consistently frustrated, it may be time to explore other options.
3. Your Coverage No Longer Fits Your Life
Your life changes, your insurance should too.
- A home remodel, new family structure, or different assets can all affect coverage needs.
- If your policy hasn’t been updated in years, it may not be protecting what matters most.
I review insurance coverage with clients regularly because what worked in the past might not work today. Your insurance should evolve with your life, not stay frozen in time.
4. You Had a Difficult Claims Experience (But Wait Before Switching)
Here’s the tricky one: poor claims experiences often make people want to switch right away.
Warning: Switching right after a claim makes you look like a risky customer. Insurers see “recent claim” instead of “long history of being claim-free.”
It’s often smarter to wait until the claim is resolved before making changes.
Why Timing Matters: The Worst Time to Switch Insurance
I've seen this scenario too many times. A client has their first claim in decades, gets frustrated with the process (which, let's face it, is never fun), and decides to switch companies while the claim is still being handled.
Here's what happens: the new insurance company doesn't see someone who's been claim-free for years. They see someone who just had a claim and is now looking to jump ship during the process. You're inadvertently presenting yourself as a high-risk client at the worst possible moment.
It's a double-whammy that makes you look like exactly the kind of customer insurance companies don't want.
The Best Time to Shop for Insurance
If you decide to explore new coverage, the best timing is when:
- You have no recent claims
- Your driving or property record is clean
- You’re experiencing consistently poor service or pricing
- You’re reviewing your finances as part of your annual planning process
That’s when you look like the kind of customer insurers want.
The Real Cost of Switching Insurance
Many people underestimate the time and energy cost of switching:
- Hours of comparing quotes
- Reviewing policies and exclusions
- Transferring payment and coverage details
- Hoping the new provider is actually better
As an experienced Financial Advisor,I've seen how much mental energy people spend on decisions that don't significantly impact their financial lives. That's energy that could be better spent on strategies that actually build wealth.
A Smarter Approach to Insurance Reviews
Instead of shopping reactively, build insurance reviews into your financial plan.
- Review coverage during annual checkups, policy renewals, or major life changes.
- Avoid making changes during claims or emotional frustration.
This approach leads to more thoughtful decisions, and coverage that truly fits your life.
You Don’t Have to Make These Decisions Alone
Insurance can be confusing, and the decisions aren't always obvious. That's where working with a CERTIFIED FINANCIAL PLANNER™ professional can help. As a fiduciary financial planner, I don't sell home and auto insurance, which means I can give you objective advice about whether your coverage makes sense as part of your overall financial plan.
I love helping clients understand how all the pieces of their financial lives work together - including insurance coverage that protects what they've worked so hard to build.
If you're wondering whether your insurance coverage is right for your situation, or if you're considering making changes, let's talk. I can help you think through the decision objectively, without the emotion that often clouds these choices.
Ready to get clarity on your insurance strategy? Follow this LINK to schedule a conversation. Let's make sure your coverage is working as hard for you as you worked to afford it.
Richard Dunn, CFP®, AIF® is a fiduciary financial planner based in West Saint Paul, Minnesota. As a registered representative and investment advisor representative with AVANTAX, a division of CETERA, he provides comprehensive financial planning services. This article is for educational purposes only and does not constitute insurance, legal, or tax advice.
FAQs: When to Shop for New Insurance
1. How often should I shop for new insurance?
Most people only need to shop for insurance every few years, or when major life changes occur. Annual reviews as part of your financial planning process are often enough to catch issues without wasting time chasing small premium differences.
2. Is it a good idea to switch insurance after filing a claim?
No. Switching right after a claim can make you look like a high-risk customer. Insurance companies see the recent claim, not your long history of being claim-free, which can lead to higher premiums or difficulty finding coverage.
3. What are the best reasons to shop for new insurance?
You should consider shopping for new coverage if:
- Your premiums rise significantly and affect your budget
- You experience consistently poor customer service
- Your coverage no longer matches your life or assets
- You’re proactively reviewing your financial plan
4. What are the risks of switching insurance too often?
Frequent switching can cost you time and energy, may not always result in better coverage, and could hurt your long-term relationship with an insurer. Some companies also reward loyalty with perks or discounts that frequent shoppers miss out on.
5. How do I know if my insurance coverage still fits my needs?
Review your coverage whenever your life changes- such as remodeling your home, getting married or divorced, or adding new assets. A financial planner can also help you evaluate whether your policy still protects what’s most important.