When to Shop Around vs Stay Loyal to Your Insurance Company
Personal finance experts often recommend shopping around for new auto and home insurance policies frequently to help keep your rates low. In fact, it’s one of the top tips you’ll read if you’re looking for ways to save money.
But sometimes, loyalty pays. Companies sometimes offer accident forgiveness, vanishing deductibles, and lower rates for long-time customers. If you’re happy with the service and the prices from your current insurance companies, there’s no reason to switch.
When to Shop Around for Car Insurance
Smart consumers typically shop around for car insurance every six to 12 months. One-in-five (22%) drivers who switched insurers saved $200 or more that year, according to a recent LendingTree survey. Another 63% saved at least $100 annually.
But shopping around doesn’t guarantee savings. Of drivers who got at least one additional quote, 81% didn’t switch. It’s possible they couldn’t find a better rate with the same coverage levels. Still, as the saying goes, it never hurts to ask.
Here are a few times it makes sense to shop around.
Your Rate Went Up at Renewal
More than half of drivers (53%) surveyed by LendingTree said their car insurance rates went up at renewal. You don’t have to accept higher premiums. Shop around for another carrier. Even if you really don’t want to switch, you may be able to use the lower price quote as leverage for a discount with your current insurance company.
You Bought a New Car
When you buy a new car, you’ll need to get a new insurance policy. It’s a good idea to call at least three different companies to see if you can find a company offering a lower rate than your current carrier.
You Moved
Insurance premiums vary based on your zip code. Moving could change your risk profile and your car insurance rates. Take the opportunity to get quotes from different carriers.
If you’ve moved to a new state, you’ll need to update your license and registration. You’ll also have to review your insurance policy to make sure it meets the minimum requirements. That’s a good time to shop around for new car insurance.
If you just bought a home, you might save even more money by bundling your home and car insurance.
You Added or Removed a Driver
If your family’s profile has changed, such as adding a newly licensed teen driver or taking an adult off your policy because they moved out, you’ll want to get a new quote from your current company and a few others.
Likewise, if a teen went away to college and left their car at home, you could be eligible for discounts.
Your Driving Record Improved
If you had tickets, accidents, or points fall off your driving record over time, you may be able to get lower insurance rates by switching carriers.
It’s Been a Year Since You’ve Reviewed Your Options
Even if you haven’t experienced any lifestyle changes, if you’ve been with the same company for at least one year, it’s worth looking around to see if you can find a lower rate elsewhere.
When to Keep Your Current Car Insurance Carrier
Shopping online for car insurance is so easy, you can switch every six to 12 months if it saves you money. But there are a few times that you should stay with your existing carrier.
You Have Accident Forgiveness or Other Perks
While many carriers increase premiums annually, some reward customer loyalty. A renewal discount of 5% to 20% is one common benefit, but this discount doesn’t always offset premium increases.
Other perks that may be worth sticking around for include:
- Small or first-time accident forgiveness
- Vanishing deductibles (your deductible decreases each year)
- Accident-free discounts
You’re in the Middle of a Claim
If you’re in the middle of an insurance claim, switching carriers could cause delays and complications with payouts or paperwork. If your carrier raised your rates immediately after the accident, wait until the case is closed to begin shopping around.
You Have a Bundled Policy with Low Rates
If you bundle car, home and other insurance you might get better savings than you would with separate policies. Don’t rush to switch unless you can snag savings on your home and car insurance together.
You’re Happy with the Value and Service from Your Insurance Company
If you feel you’re getting good value from your current car insurance company, you may not want to switch. Just don’t let complacency lull you into paying more for your insurance than you have to.
Be open to shopping around but weigh all factors before you switch. Coverage levels, deductibles, loyalty discounts, and customer service all play a role in determining the best company.
When to Shop Around for Home Insurance
Shopping for home insurance often requires more effort than shopping for car insurance. Older homes may require an exterior or interior inspection to determine your risk profile. If you’re in an area prone to natural disasters, your insurer may also request an inspection.
Experts recommend getting home insurance quotes at least every one to three years. But there are other times it also makes sense to shop.
You’ve Made Home Improvements
Some home improvements can lower your insurance costs and discounts may vary based on the carrier.
Call around for home insurance quotes if you’ve made any of the following changes to your property:
- A new roof
- Impact-resistant windows
- Hurricane shutters
- Monitored home security systems
- Monitored fire or smoke alarms
- Water sensors with automatic shut-off
Your Premium Increased at Renewal
Home insurance premiums tend to rise annually. But if your premium jumped up by more than 10%, you may be able to save with a different company.
You Bought a New Home
Obviously, you’ll need a new home insurance policy if you buy a new house. Don’t assume your current carrier will offer the lowest rates. Shop around for savings.
It’s Been Three Years or More Since You Shopped Around
If you haven’t reviewed your home insurance policy in three years or more, you might be overpaying. Get quotes from at least three companies to see if you could save money.
Make sure to take note of any features in your home that could yield discounts, like monitored alarm systems, water sensors, or fire sprinklers.
When to Keep Your Current Home Insurance Policy
Even if it’s been a while, it may not be the right time to shop around for home insurance. Keep your current company if any of the following apply.
You Have an Older Home
It may be harder, and more expensive, to insure an older home. A new company may want an interior inspection and could request expensive upgrades or repairs. If your home insurance rates are reasonable with your current company, it may not be worth the hassle to switch.
You Have Loyalty Discounts or Perks
Like car insurance companies, home insurance companies sometimes offer loyalty discounts if you’ve been with a company for several years.
You Have a Discount for Going Claim-Free
If you’ve gone years without filing a claim, your current insurance provider may offer a discount. However, you may be able to show your claim-free history to another carrier and get an even bigger discount.
Your Policies Are Bundled
If you bundle home, car, and other insurance, such as pet insurance or an umbrella policy, it might be worth staying with your current carrier. Discounts for bundling may exceed any other savings.
However, you can always shop all your policies together. You may find a carrier with a lower bundled rate.
The information provided on this website is for general informational and educational purposes only and should not be considered legal, financial, or insurance advice. While we strive to keep content accurate and up to date, insurance laws, policies, and regulations can vary by state and may change over time.
Nothing on this site constitutes professional advice or a recommendation of any specific insurance product, provider, or strategy. You should consult with a licensed insurance agent, financial advisor, or legal professional regarding your individual situation before making any decisions.
Conclusion
Switching insurance takes a little bit of time, but don’t let that stop you from potentially saving hundreds of dollars. Just know the best, and worst, times to switch so you can maximize your savings.
https://www.lendingtree.com/insurance/switching-insurers-survey
https://www.jgwentworth.com/resources/mp-choosing-car-insurance-moving-new-state
https://agents.libertymutual.com/loyalty
https://www.redfin.com/blog/homeowners-insurance-without-an-inspection
https://www.usnews.com/insurance/homeowners-insurance/homeowners-insurance-discounts
