Car insurance rates are going up this year. How much more will you pay? Do you even need to pay more, or can you make savings instead? That depends on the choices you make — beginning with shopping around for different coverage plans and requesting quotes from at least three different insurers.
Saving money is easily the most compelling reason to shop around for different coverage plans, but it’s not the only one. Here’s what you need to know before you decide to stick with your current insurer.
1. Shop Around to Make Serious Savings on Your Car Insurance Payments
People shopping around for car insurance companies should know that every insurer structures its premiums differently. Your driver profile may be more favorable with another insurance company, leading to significant savings.
The discounts insurance companies can also vary widely. Beyond good driver discounts, some insurers offer discounts to drivers who have taken defensive driving safety classes, “good student” discounts, or discounts for people bundling different types of coverage. Most insurers offer discounts for drivers who can pay their premium in full, but the amount will vary.
It’s worth shopping around even if your current insurer offers a loyalty discount you think you don’t want to lose. You won’t know until you see what other companies offer!
2. Shop Around for Better Customer Service
As a driver, you hope to have as little to do with your car insurance company as possible — but accidents can happen. If you are in a car crash or your vehicle is stolen or vandalized, you already have a huge headache to deal with. An insurance company with poor customer service will only make things worse.
You can begin determining whether an insurer offers quality customer service when you get in touch to ask questions about their coverage plans. However, reading reviews is another important part of your research.
3. Shop Around for Specific Coverage Options
Not all insurance companies offer the same type of coverage. Have your needs changed recently? Are you, for example, thinking of becoming a ride-share provider? Your current car insurance company may or may not provide the type of coverage you need now.
In these cases, shopping around for a new insurance company allows you to evaluate which insurer offers the best and most affordable coverage for your needs.
4. Your Insurer May Penalize You for Your Loyalty
It sounds stupid, but it’s often true — insurance companies engage in so-called price optimization in many states. That essentially means they determine the statistical likelihood that you will shop around. If your insurer has reason to believe you won’t, you may end up paying more.
Your insurance company isn’t loyal to you (as this practice shows!), so you have no reason to feel any loyalty toward your insurer, either.
Shopping Around for Car Insurance Coverage: Some Final Advice
Car insurance rates are rising for several reasons. Beyond a rising cost of living, car collisions are becoming more severe, and the cost of car repairs is rising faster than inflation.
Having the right coverage is vital for responsible drivers, but that doesn’t mean you can’t make significant savings. Shopping around may get you a better deal and better coverage. You may also end up with an insurance company that provides better customer service. Having seen that you’re willing to shop around for a better rate, an insurer may incentivize you with discounts next year.
Make a habit of evaluating your car insurance coverage plan — and shopping around every single year! It may be a hassle, but shopping around ensures you get the best possible coverage at the best possible rate. Good coverage may give you peace of mind, but so does a healthy wallet!