Easily Save Money By Staying Loyal to Your Insurer

Staying with your insurer for a number of years can result in new discounts that can easily shave hundreds of dollars off of your premium.

While the majority of insurance experts recommend shopping your insurance coverage on a yearly basis (that is still solid advice) staying loyal to your current insurer can also be a great way to save some coin.

Shopping your coverage is a great way to make sure you are getting a fair price on your coverage and if you find a new policy that shaves hundreds or even thousands off your annual insurance costs you should absolutely switch, assuming the new coverage offers the same protection. However, if the savings is only $200 per year or less it may pay to stay with your current insurer.

Staying with your insurer for a number of years can result in new discounts that can easily shave hundreds of dollars off of your premium. Here are a few reasons to consider staying with your insurance company:

Discounts

Many insurance companies offer a discount to loyal customers. The parameters of the discount can vary but look for a loyalty discount after 3-5 years with the same insurer. Discount amounts can hit 15-25 percent but can vary widely. Contact your insurer to see if they offer a loyalty discount and how you can qualify.

A bundling discount is another option if you stay with your current insurer. Adding a car insurance or umbrella policy to your homeowners policy will almost always result in a bundling discount. This discount can easily range up to 25 percent. Your agent should be able to explain what policies will result in a bundling discount.

Deductible Reductions

Many insurers offer a deductible reduction for every year you stay with them and are claim free. While this mainly is related to car insurance it is sometimes applied to other types of insurance. While the reduction requirements vary, in most cases you have to stay claim free and your deductible will be reduced $100 a year until it is completely gone. Once you make a claim on your policy the full deductible will go back into effect and you will start over.

Accident Forgiveness

This perk is reserved solely for car insurance in most cases but it can save you thousands of dollars if you are in a serious accident and need to make a claim. However, accident forgiveness is not an automatic perk with most insurers, you often have to earn it by staying loyal to an insurance company. Parameters vary but many insurers require you to be a customer for three years before they offer this perk.

Without accident forgiveness your premium will be headed up pretty dramatically after an accident so this benefit can absolutely be worth staying loyal.

Better Relationship With Your Agent

The longer you stay with your insurer and agent, the better it is for your relationship. Having a good relationship with your agent can reap a variety of benefits but the biggest positive is when it comes to deciding what kind of coverage your need to fully protect your assets. They become familiar with your driving habits as well as the type of coverage you need for your home or business. They can recommend new coverages and make sure you are fully covered at a fair price.

In addition, when it comes time to make a claim, your agent will be an advocate for you, making sure your claim is paid quickly and fairly. If you switch insurers or agents on a regular basis you never get a chance to build these types of relationships.

Switching Can Be Costly

While it varies between insurers, there can be costs to switching. Many insurance companies charge new policy fees as do some agents. They may also require a down payment, especially if your credit is less than stellar. While new policy fees are rarely enough to warrant sticking with a more expensive policy, if the savings on the new policy is not that dramatic it may make financial sense to stick with your current insurer.

The Bottom Line

We will always encourage homeowners to shop their coverage on a regular basis but unless you find a policy that is at least $200 less than you current rate it may make more sense to stay with your current insurer.

Make sure that you are getting all of the discounts and reductions that we discussed in this article to ensure you are getting the best deal possible on your coverage.