The $1,100 Car Insurance Myth You Need to Stop Believing
I saved $1,100 on car insurance this year by debunking this common myth.
You get your car insurance renewal offer and see higher rates than last year despite making no claims and no other changes to your policy. In frustration, you think about switching, but it doesn't seem easy and who knows if you'll even get a better quote elsewhere.
It is a common misconception that switching car insurance is hard. In this year's Kiplinger Reader's Choice Awards survey, dozens of respondents complained of rising premiums and declining customer service but said the idea of shopping around seemed "overwhelming," "painful" or "high pressure."
"I'd like to look elsewhere but it's not easy to do," said one Kiplinger reader. In today's digital age, however, shopping around for better rates is easier than ever. And continuing to believe this myth about the difficulty of switching car insurance can cost you hundreds of dollars each year – not a price worth paying at a time when all of your other bills are going up, too.
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The "switching car insurance is complicated" myth is costing you hundreds
Whenever I get a renewal letter, it takes me only one hour to get multiple quotes and either switch or leverage those offers to get a better rate from my existing insurance provider.
My car insurance policy is up for renewal every six months, so I shop it twice a year. This year alone, I've switched both times, saving a little over $500 each time. That's a total savings of just over $1,100 over the year for about two hours of work.
My experience isn't unusual. According to Insurify, customers who shop around save up to $1,100 annually on average. In fact, many state insurance commissioners recommend shopping around for a new policy any time you face a rate hike for this exact reason.
With the tools available online, like our Bankrate-powered car insurance comparison tool below, it's easy to get multiple quotes at once and compare rates side-by-side:
Then, choose an offer that looks good, make sure the policy details match what you're currently paying for or make any changes that you've been meaning to make.
How to maximize your savings when shopping car insurance
Since the entire process can be done online, it's always worth taking a few minutes to at least see what kind of quotes you'd get from competitors if you renewal offer is higher than your previous rate.
To make the comparison process even more efficient, follow these tips:
- Pull up your renewal offer so you can easily compare policy details side-by-side.
- Use this time to review your coverage details and decide if they still make sense for you. For example, on my most recent switch, I was able to lower my deductibles and still pay less than my renewal offer.
- Try to find the dollar amount of any discounts you currently have. If switching would require unbundling your home and auto insurance, for example, you'd lose that bundling discount. But if you know exactly how much it's worth, it's easy to see if the savings from switching are high enough to justify sacrificing that discount.
- Call your current insurance provider before switching. Not only is it good to notify your provider that you're not renewing, but this gives the company a chance to put together a new renewal offer that beats the competitor quote you found. In my case, the new offer was still higher than the competitor, so I followed through on the switch. But I have been able to negotiate a cheaper renewal in the past by doing this.
If you've avoided shopping for car insurance because you assumed it would be complicated, there's a good chance you're paying more than you need to for your coverage. Comparing multiple quotes is easier than you might think and can save you more money than you might think.
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