Have you ever had this nagging feeling that your auto insurer is charging very high rates and you can find them cheaper somewhere else? Statistically, a large number of policyholders have similar feelings and nearly 70% of them don’t even move a finger to fix it. It sounds crazy but you can have the same coverage while slashing your premium to half, especially if you haven’t compared prices for some time.
Many people are aware of how expensive it is but do nothing about it just as what the companies want. They have already tied you down with auto renewal instructions and they tell you to do nothing as they will take care of it for you. What it really means is that they will keep charging you the usual and take the money out of your account for convenience.
You see, statistics is a large part of underwriting and they know anything and everything about selling policies. They know very well that 70% of policyholders will just renew even if they put up the rates. That is why they are confident that they can optimize profits by keeping the people who are likely to stay at a higher price bracket while they offer better quotes to attract new customers.
Since you are doing nothing they will do nothing as well. They will not look to see if you can get better rates or if they can offer better policy packages. As long as you are not complaining there is no need to do anything. Besides, they will be losing out on profits if they were to dig out the best deals for you.
There are plenty of auto insurance advertisements emphisizing on saving money. You probably think that they would say it to draw attention so that you get quotes from them. It is true that not all of those companies can actually keep promises. Nonetheless, you may be shooting yourself in the foot by being too sceptical. Here are a few reasons why you can get reduced car insurance prices.
- Loyal Policyholders Are Kept at Old Rates
The longer you are with the same carrier the higher the chance of saving money especially if you have not been getting alternative quotes. They constantly update rates and discount schemes according to competition and changing underwriting criteria. However, a large number of them don’t upgrade the existing policyholders to better and cheaper packages. You would think that loyal customers would receive lower vehicle insurance quotes at renewals. But this may not be the case even though they may now be qualifying for a few more discounts.
- You May Currently Be Penalized
They can apply surcharges because of many things that they don’t like about customers. Larger ones are more likely to be choosy in types of risks they will accept. You may be penalized for being young, having a teenage listed driver, having a flashy car, living in a high risk zip code, having a traffic violation or a claim in records and having low credit score. These surcharges work against you while discounts work in favour. They can be more expensive if they don’t offer you the discounts you deserve and apply surcharges on top of it. But motorists get older, wiser and more financially savvy in time. That is why it is essential to update your details and get new quotes.
- Each Company Decides Its Own Prices
Every underwriter has a unique way of evaluating risk and calculating premiums. While one may be very cautious with teenage drivers the other can see them as customers for years. A company with a long term view can be comfortable with taking a loss for the first or second year. They will know that they will recoup it later as those youngsters become low risk mature drivers and keep paying for years.
There are many reasons why company ABC may be happy to offer you 50% lower auto insurance rates for the exact same coverage. And ABC can be as good as or even better than the current provider.
Steps to Take to Bring Costs Down
It may come to you as a surprise but it is all about the attitude. You may have already qualified for 50% discounts as discussed above and not know it. How are you supposed to know if you don’t check for quotes? It is like expecting to win the lottery without buying a ticket. Here is what you need to do.
- Don’t be Quick to Reject
Being one of those motorists who believe that his/her carrier is the best and cheapest doesn’t help you. You need to look at others’ policy offerings and get quotes. Brokers are no different. Talk to another broker in the area and see how good he/she is in finding the best offer. Alternatively, you can go online and search using various sources like comparison websites and direct approach.
Don’t reject the idea that you can halve costs without giving up on essential coverage until you check the alternatives.
Ask why people you know are paying less for automobile insurance. Ask the agent if you can get further discounts. Ask them if there is anything else they can do to reduce costs. Ask why you don’t get the same prices that new customers get. You should not worry that you will offend or bother anyone. First of all, it is their job to explain it to you. And secondly, it is your right to know.
- Loyalty to a Point
Loyalty is a great word and generally appreciated. However, it is up to you to test if it is the case and be prepared to walk out the door if not. Blind loyalty doesn’t pay. It doesn’t make sense to stay with them because they insure your parents and siblings. You should only be loyal if they offer you the best customer service, quickest claim settlements and most competitive premiums.
- Be Prepared to Spare Time
Learning how to reduce car insurance costs, advantages and shortcomings of a policy and alternatives takes little time. This assumed complications and boring nature of the subject can put people off easily. It is a lot easier and quicker to get one quote and go with it. However, it would be like betting on a horse when you have no idea as to how good it is. Most people get about 3 to 5 estimates before they make up their mind. If you go online you can get 5 in under an hour and pick the best deal within a couple of hours.
There is no guarantee that you will save as much as 50%. However, there are a few examples of people who have already done just that. Some of them halved their premiums without even switching. If you don’t believe us read it here. They can easily offer you many improvements but you have to push them for it.