Drivers in these states could see the biggest discount on car insurance if they switched

The commercials are right. You really can save hundreds of dollars by switching your car insurance.

On average, you could save $865 a year, or 37 percent off your current premium, but still maintain the exact same coverage, according to a state-by-state analysis given exclusively to USA TODAY by Gabi, an insurance comparison site and app. Gabi’s analysis of rates took into account the car insurance policies of 100,000 users. 

How much you save depends on where you live.

Drivers in Maine and Massachusetts, for example, would see the biggest discount, percentage-wise, at 47 percent, if they switched policies.

South Dakota drivers would see the smallest benefit by switching —a 25 percent drop. But South Dakota residents are overpaying by the least amount to begin with — $427 on average.

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It may sound gimmicky, but it actually does pay to shop around.

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“The reason someone is overpaying is they bought a rate when it was cheap, but over time, their life situation changed. They bought a different car, moved to another zip code, got married,” said Gabi CEO and co-founder Hanno Fichtner. “The company may now have an unattractive rate for your coverage.”

How much are you overpaying?

Whitney Rogers, a 31-year-old mother of two who lives in Madisonville, Louisiana, has been with the same car insurance company since graduating from college. Eager to steady her financial situation by paying down debt, improving her credit score and saving money where she could, she recently searched using Gabi.

A day later, she got a quote for the same coverage for her and her husband’s cars, but for almost $900 less over six months.

“That savings is going to pay down our credit card debt,” said Rogers, an inpatient clinical pharmacist.

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On average, residents who live in Louisiana, like Rogers, spend $3,111 a year for car insurance, but could save 37 percent, or $1,159, by switching providers, Gabi’s analysis found.

Why are you paying too much?

Many factors determine your car insurance premium. Some of them are personal attributes such as your driving history and credit score. When those change, your insurer could offer higher or lower rates. For example, Rogers’ recent efforts to increase her credit score probably helped her get a better rate.

Another factor is the insurance companies themselves. Some may prefer one type of driver over others, Fichtner said.

“There are companies that have favorable rates for good driving histories, while other companies have more attractive rates for older drivers,” Fichtner said. “If you have a low coverage amount when you first buy your policy, the [same] company may have unattractive rates when you want higher coverage.”

Your state also plays a big role. A state’s crime rate, population density, legal environment and insurance competition contribute to an insurer’s rates.

States with many insurers competing with one another – such as Maine – often have rates that fluctuate more often. You’re more likely to find bigger differences in rates when you shop around in those states, Fichtner said.

When to shop around

There’s no bad time to compare rates. But you definitely want to look around after a major life change – such as getting married, retiring or getting a job closer to home – all of which can affect rates available to you.

You don’t have to wait until your policy ends, either.

“That’s a common misconception,” Fichtner said. “You can cancel the day after buying a policy and usually get money back on a prorated basis.” Some insurers may charge a cancellation fee.

People shouldn’t stop at just car insurance, either. They should look at other options for their homeowner’s, renter’s, umbrella, motorcycle and other property insurance.

DiAnte Yawn of Upper Marlboro, Maryland, had bundled his car and homeowner’s insurance together with the same insurer since 2015. “It didn’t do anything but go up,” he said. “It was $441 a month. That’s a second condo.”

After searching around with Gabi, the 40-year-old bookkeeper found a bundle for $219 a month with an insurer that received good reviews online.

“My policy was ongoing, but I canceled immediately once I got that quote,” he said.

While he’s happy with the coverage now, Yawn plans to look around again if his circumstances change.

“You want to see the options,” he said.