Wednesday, May 9, 2007

Shop for insurance yearly

I personally use an online service to shop yearly for insurance. If I don't like the price it gives me, I will start calling around to the local and well known insurance carriers. But last year, insweb saved me over $200 a year on my family's car insurance. More if you consider that my previous insurer, State Farm, raised my rates by about $100 a year for no reason at all. As far as I can tell, insurance companies are no longer rewarding their long term customers.

I suppose it makes sense. The longer I stay with one company, the more likely I am (statistically) to file a claim. By raising my rates after a few years of paying into my policy, they encourage me to go elsewhere and eliminate their risk.

You should shop for insurance once a year. Twice a year might be pushing it, I personally don't want to deal with changing companies every six months. That's why insweb is a great tool. I can take 10 minutes out of my day once every year, input my info, and see if I can cut my rate significantly. If not, and if my current rate has not been increased, I stay.

Don't forget to shop around for home owner's insurance as well as auto. Life insurance is different because typically you are locked into your rate for the life of your policy, 20 or 30 years.

Shopping for insurance should be an annual event, like filing your taxes. Not doing it is just throwing money away.

Tip: Sign up with insweb with a secondary email address, as you will get quite a bit of mail from them.


Jim said...

I've never heard of this particular website for checking rate quotes. This seems to be the big thing lately for marketing insurance, "Check us out if we can't save you money we'll tell you who will!" kind of message. Then there's the caveman and the little green gecko or the duck. I personally do not know anyone who uses any of these companies for their insurance needs. Before I switched insurance carriers I had Safeco and a family issue came about and I switched to Country, but found I saved some money.

The obvious thing to keeping your rates low are having a clean driving record and no accidents. I like the sound of the program Allstate is offering to reduce the premium every year you don't have an accident. The not so obvious that some may not be aware of is keeping your credit in good standing to get the better rates. If these companies see you cannot handle yourself financially they consider you higher risk and you pay more.

Insurance is one of those things where you want your choices to matter if you actually need to use it. I like having insurance with strong companies who have been in the business, even if I have to pay a little more to have that peace of mind.

Beyond the Consumer said...

Progressive does that type of marketing, but when I used Progressives rate calculator they gave me an estimate from State Farm, who I eventually went with, that was much higher than what State Farm actually gave me. So I do not put any faith in Progressive.

Sites like insweb (there are many similar ones out there as well) I believe just make advertising revenue. I have found them useful and they do list well known companies.

Carin said...

Great article!

With life and health insurance, it's important to review your coverage at least once a year. Any major changes in your life such as buying a home, starting a family etc. may mean you should have more life coverage. On the other hand, you may need less health coverage if you or your partner now has comprehensive employee benefits.

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