Most experts advise policyholders to shop for car insurance often and general consensus is that you should get alternative quotes and compare them with each other at least once a year. Many people start searching for quotes because they are curious as to how much they can save and get surprised with their savings. Think about how many times you saved a lot of money by shopping for the best price. Don’t you think the same applies to insuring vehicles? Don’t you want to know how to shop for auto insurance under an hour?
How Much Can You Save by Shopping for Car Insurance?
You may think that it is boring to look into your current coverage, think about how to improve it and start checking for cheap auto insurance quotes. That is why the following questions are common. Isn’t once checking for the best car insurance quotes enough? Wouldn’t your current vehicle insurer offer the best rates at each renewal? These are great excuses not to shop around and just let your policy renew automatically. You never know how competitive your current insurer is unless you compare quotes.
Even if you find lower premiums would it be worth the time you spent for it and you will spend switching companies? The answer is unequivocal yes, according to one study that found the US auto insurance policyholders can save on average $850 by shopping for car insurance quotes. It is over $70 a month? Furthermore, the average cost of auto insurance in the US is $841. That means most people can reduce their premium to half. It is not an ignorable figure for most household budgets and you don’t make any sacrifices for it since you are getting the same coverage from a different insurer. The only sacrifice you make is the initial time you devote to finding the cheapest car insurance company.
Nearly 40% of the US car insurance policyholders never shop around. Even worse, nearly 30% bought their policy after getting only 1 quote. Why on earth would you be so gullible to spend hundreds, if not thousands, of dollars more for something you can buy half the price?
It may sound like too much work to get auto insurance quotes and switch companies. It really is not the case when you can call a broker and let him do the work for you. And it only takes an hour to get quotes online and complete your car insurance shopping. Once you fill one quote form online it is much easier to fill a few more and get multiple quotes. It should only take you between 5 to 8 minutes to complete each form and get instant auto insurance quote online. All you need is your basic details, coverage required and car details.
Switching car insurance companies at renewal isn’t a problem either. Your policy will expire anyway if you don’t pay. All you have to do is to set up another policy to take over from the renewal date. Also, you must cancel any auto renewal payment instructions you have in place. Just make sure your new policy starts when the old one expires to avoid any gaps in cover. If the renewal isn’t due yet you will need to cancel your current policy when you arrange a new one. You may need to pay a small cancellation fee with some companies but you will get unused portion of prepaid premiums.
Is auto insurance shopping worth your time? If you are a hot shot stock broker making hundreds of thousands of dollars in a year, off course your time may be more valuable. However, many people would be happy to save $100 when they spend a few minutes of their spare time. Besides, even you are so busy you can still drop an e-mail to your broker asking him to get alternative quotes again for you at renewal.
The same study also finds that 70% of policyholders haven’t switched their insurers in the last 4 years. The reason why people stay with their insurers isn’t because they couldn’t find better value policies from alternative insurers or it takes to long to shop around. How could they find better deals when they don’t do the easy work? Only 16% of policyholders get alternative quotes once a year. Make no mistake. The difference between the cheapest car insurance quote and most expensive one can be 4 or 5 times.
Next time you get a high quote, don’t think it is because you have one claim in the last 3 years, a recent speeding ticket or poor credit. Probably why your car insurance is so high has very little to do with your driving record but a lot to do with being insured by an expensive company.
So, here is how to shop for car insurance step by step;
- Before you start shopping you need to know what you want to buy. That is why you need to answer this question; how much car insurance do I need? Read the post if you need help in determining the level of coverage required. Auto insurance shopping isn’t just about finding the cheapest policy but also making sure that you have a good coverage so that you are not left high and dry when you have a claim. Most companies would pay a legitimate claim sooner or later. But you need to have the coverage for the loss suffered before you can claim. One of the first things you should do is to make sure you have sufficient liability auto insurance coverage because especially injury claims can be high even in a moderate accident. Usually, the limit to your own losses is the value of your automobile. However, there is no limit to how much a liability claim can be.
- Have your details handy to avoid keep getting up and looking for something. Find your current vehicle insurance policy, driver license and registration document. Get your phone and get yourself a beverage. And, of course, turn on your laptop. In the Comfort of your home is the best way to shop for car insurance online.
- Start with getting online quotes thorough an auto insurance comparison website like this one. Enter your zip code above and our platform will take you to the cheapest insurers in your area in seconds. You can get direct auto insurance quotes from each one of them in 5 minutes. All of these quotes are accurate and cheapest you can get from each company. So, you should be able to get enough quotes and buy your policy in less than 1 hour, if you find what you are looking for.
- Compare all these quotes for price, reliability of the insurer and coverage. Check for any special conditions or enforcements and check for payment options if you need to pay by instalments. Remember that your policy needs to meet your personal circumstances and be inline with your preferences. For example, quite a few people prefer to pay little bit more if a more reputable insurer could insure them.
- Don’t hesitate to call any company for clarification or further advice. It is fine if you just want to run through your options and coverage once more with an agent on the phone before buying. Sometimes a good agent can point you in the right direction. But you should watch out for the ones who will see this as an opportunity for upselling. The beauty of auto insurance shopping online is that there is nobody nagging on your ears. It is totally up to you which way you take your search. You can also call a broker in your area and see what they can find for you. If you start your car insurance shopping early you will not be pressured to make a quick decision.
Always remember that you are on the driving seat here. You can buy your policy online and be done with it. You can decide to sleep on it before making a decision or contact more insurers another day. All the while remember that if you can save $800 in couple of hours of work you would be making $400 an hour. That is money well earned and can be spent on something nice.
Why Do You Need to Shop for Auto Insurance Often?
We are made to believe that being a good loyal customer will always pay. This notion and laziness may make you pay more for auto insurance. There are several studies that show customers who regularly shop for car insurance save more money than loyal customers. Now, we will answer why is it important to check for alternative auto insurance quotes every so often?
1. You May Need to Switch to Take Advantage of New Discounts
Underwriters work hard to come up with new and attractive vehicle insurance policy packages. Furthermore, they constantly check for different factors that affect rates. So, often different coverage combinations and discounts are introduced to the market. Today, your financial positions and credit score may be more important to some insurers than having an accident in your record. For example, if you see large car insurance premium increase after an accident you would do well by searching for insurers who care less about the past accident and place more importance on what is the chance of you making another claim based on who you are. Quite a few companies try to predict the chance of any future claim rather than just doubling your premium for a past accident.
2. Your Insurer May Be Raising Rates due to Recent Difficulties
Do you think that your auto insurance company will set the rates once and do nothing about it for a while? Every company has an actuary department filled with hundreds of smart people trying to work out how can their company make more profits. Slight changes in financial environment, competition in the market, statistical increase in risks or operational losses suffered by the company require adjustments on the rates. That in turn requires shopping for auto insurance often. Think about other hundred companies that are doing the same? By the time your next renewal comes you have a whole new set of vehicle insurance rates in the market. If you are not getting alternative quotations you will be oblivious to those changes. Why do you think most insurers only sell 6 month car insurance? It is because they are aware of the risks and therefore don’t want to be tied down for 1 year. If you don’t take our words take their words that a lot changes in 6 months.
3. Shop for Car Insurance when Circumstances Changes
Maybe it is coming up to three years since you had that speeding ticket and points on your driving license. They will drop off your record by next renewal. Or it is coming to three years since you had last had an accident. Many companies are not going to consider that one accident after 3 years when calculating your premium. Is your current insurer one of them? You may have changed your address, job, car and marital status since. These are only few of the things that can affect your automobile insurance cost.
You shouldn’t actually wait until renewal to get new quotes when you have big changes in your circumstances like moving into your first home, getting married, changing your car or job. You will have to inform your insurer of the changes and they will have to recalculate the premium anyway. So, why not shop for auto insurance a little before agreeing to new terms with your existing insurer?
4. Changes in External Factors Can Make Switching Beneficial
Even there is no change in your life, maybe vandalism increased in your zip code, your insurer suffered large losses in your state or state insurance laws changed. These are the external factors that can affect your rates.
Whichever expert or adviser you choose, they will all say the same thing if they are looking at it objectively. You should shop for car insurance ideally at least once a year, if not at each renewal. This is your way of saying that you are not going to let insurers have their way with you and charge whatever premium they like.