Why Shop Around Before Renewing Car Insurance?

When it’s renewal time, you have two options: stick with the current carrier and hope for future price breaks or switch carrier and start all over again. It is wise to analyze all options and compare financial consequences of each choice. Always shop around before renewing car insurance. You can use our website to get a free online car insurance quote from any trustworthy carrier in your area.

  1. You will notice that the price difference between carriers is pretty high. Pricing formulas take into account much more than you think. Insurers determine individual rates based on confidential scoring models that, in addition to driving history and vehicle information, take into account a wide range of personal details from the basics (age, gender, zip code) to wider socioeconomic factors like employment status, education levels, credit scores, and home ownership. And every insurer uses their own unique pricing formulas. This is why you should as many quotes as possible and analyze prices.
  2. Many companies use the so called “price optimization” technique. This is a formula based on your price sensitive and tells the insurer how much price increase you are willing to tolerate. Unless you live in California, Florida, Indiana, Maryland, Ohio, Vermont, or Washington— where price optimization has been outlawed, the chances are good that insurance companies are using statistical models to determine if you will detect or not the price increase.
  3. Being loyal does not always pay off. This is also strongly related to the previous point. According to J.D. Power, customers who switch insurance carriers save around $300 on average. That’s quite a lot of money.
  4. You can put a little pressure on your current provider. Shopping around with a few weeks before renewal and informing the company that you found better prices may motivate the company to lower the prices a bit.

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