Despite talk of loyalty discounts, you can switch your car insurance right now and probably find a better deal.
Car insurance is one of those things you don’t think about that much.
Like most bills, I have it on autopilot, so it only really becomes top of mind when I have some kind of insurance claim that I need to deal with.
Thus was the situation I was in this past month. My car was in the shop to repair a small side impact (all cosmetic, no one was harmed, thank you) and I was not only forced to wait a few weeks to get it fixed, but also to pay a $500 deductible.
It wasn’t terrible, but I wanted to do better.
I’ve actually had it out for my insurance company for a while now, ever since some teenage yobbo had backed into me in a parking lot, and my insurance took his side, and said that I hit him.
I finally decided to do something about this.
And what I found blew my mind. Apparently, car insurance companies do not place any real value on your loyalty.
And that means that you should probably switch car insurance companies right now.
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The Ol’ Insurance Company
I’d been with my car insurance company for over a decade. I had found an insurance agent who suggested it as the best option at the time, and I went with their recommendation. I started by paying around $1,000 a year for top-shelf coverage, as I don’t think there’s any point in skimping on insurance that will help you if the unthinkable happens and you send someone to the hospital.
And over the years, as you all probably know, costs went up. And up. And up.
Fast forward to today, and I was paying about $180 a month for coverage. All that and with a $500 deductible, I really felt like I could do better.
So I did all those online quote services and asked my agent if they had any big ideas. And they did.
You can switch at any time
The big idea they had was that I could switch car insurance at any time.
Most people don’t know this (me included until recently). You don’t need to wait until your policy renews. You don’t need to wait until your monthly payment is due. You can switch multiple times a year, even. You can switch whenever, and you can even get your unused premium refunded to you!
Why did no one tell me this??
Usually, companies who have the “boiling frog” business model (where prices go up a lot each year) can do so because you’re locked in and it’s really hard to move away.
If you are not locked in, then it seems clear that companies should keep their prices low so as to incentivize you to stay.
But that is not what’s happening with car insurance. New companies want your business and will undercut your existing rate, in a rare-but-happy win for the consumer. I guess they are just hoping that no one bothers to look into switching, because they’re busy or something.
Little, different, better
My insurance agent found me a policy that was $800 a year cheaper, had half the deductible ($250 instead of $500) and included rental cars for when my car was in the shop.
So, better coverage and lower price? What was I missing?
It helped that they were putting me with a car insurance company that I had never heard of. I hadn’t even considered any options beyond the Progressive/GEICO/Allstate behemoths, but apparently, there are other well-rated companies that don’t bother to advertise on TV. Who knew?
They took care of the switch, and it was absolutely painless. I barely had to do anything.
It’s time to switch
If you haven’t changed your car insurance in a few years, you’re probably paying more than you have to.
If you have an independent insurance agent, call the up and ask them to see if you can get cheaper or better coverage with a different provider.
And if you don’t have an insurance agent, you can go online and get free quotes from all the major providers.
You might also want to find yourself an insurance agent. After all, I never would have found my current car insurance without their help. (And all the online quotes I found were more expensive.)
As I’ve long said, I’m not a fan of frugality, the mindset of “how to spend less”. But when it comes to something like car insurance, if you can pay less and get the same value, and this will be true every month going forward—at least for a while—it seems like an obvious change to make.
Just don’t let it get too long before you make another switch in the future.
