We all want a good deal on car insurance, but a lot of us don’t like to shop around. That’s a mistake.
Just ask Katie Trott. She shops her auto insurance rates every year and has seen the savings, because rates can vary so widely.
“I’ve changed over the years in a couple of different policies and I’ve saved a lot of money,” Trott said.
Unfortunately, many of us are creatures of habit and stick with the carrier we have. According to a survey by InsuranceQuotes.com, only 20 percent of car owners said they shopped for auto insurance within the past 12 months.
Jennifer Giles lives and works in Tampa. She hasn’t shopped her insurance in years. “I just don’t feel like it,” she said. “I don’t really have the time, I guess. It doesn’t cross my mind.”
You might think you’re rewarded for being loyal to one carrier, but often, that’s not the case. The best deals are reserved for new customers to get them to sign up.
Jerrod Lauth hasn’t compared his rates in five or six years and admits he’s probably not getting the best deal. “Yeah, I could probably shop and get a better deal,” he said, laughing.
If you’ve been with a company for a while, your rates often creep up every year. You might not get hit with a hefty premium increase that would make you mad enough to cancel. But take note: Those small increases add up over time.
The Consumer Federation of America warns that some insurance companies also use something called “price optimization” to determine whether to raise your rates. Data and algorithms are used to figure out how sensitive you are to increases and then, based in part on that information rates can go up a little or a lot.
Many insurance carriers deny using “price optimization,” but several state insurance commissioners are investigating several companies and two class action lawsuits are underway challenging the practice.
Big premium increases are the main thing that drives people to shop for new insurance, but you might not want to wait.
“Make sure you do look every year,” said Trott. “Otherwise, you could be missing out on some big discounts.”
When you sit down to compare rates, it does take some time. If you do it online, expect to spend about 10 to 15 minutes per quote to put in all your information. Make sure you keep the coverage the same on each one - so you’re comparing apples to apples. You can get quotes from the websites of individual carriers or use an independent agent who represents various companies.
Also, websites such as Insurance.com or NetQuote.com can compare the rates of various companies. One note: Don’t expect an instant quote from these sites. In most cases, you’ll be contacted by agents looking for your business.
If you get a better quote, switch, or, if you want to stay with your carrier, ask them to match the lower quote. If they’re not receptive, threaten to cancel, as that usually gets their attention.
Whatever company you go with, be sure to explore all your possible discounts including being a good driver, having good credit, being a homeowner and even belonging to professional organizations and clubs, such as AAA.
Click here for some tips from Edmunds.com on how to shop for insurance.