Financial Power

Loyalty is really important to me, but when it comes to car insurance the question remains:

How much is your loyalty discount really worth?

If you are like most consumers, you might worry that switching insurance companies means losing your “loyalty discount”. The truth is that switching insurance companies may cause you to lose your loyalty discount (IF you had one in the first place), but that doesn’t necessarily mean you’ll pay more for car insurance or that you can’t save a bundle in the end. Remember: multi car (two or more cars) and multi category (home and car) discount is NOT loyalty discount.

The fact is some insurance companies may provide a small discount on your premium if you’ve been with them for a long time, but that small discount can quickly become irrelevant if another car insurance company has a rate for you that is significantly less that what you’re paying. After all, what good is a 5% off of an annual rate of $1,500 (a $75 annual saving) if you could pay $1,150 (a $350 annual saving) with another company?

When it comes to car insurance we have to consider the annual premium we pay and how can we save on our annual premium.

How Much Do Rates Really Differ Across Car Insurance Companies?

The rates charged by different car insurance companies to insure the same driver, with the same car, for the same coverage, can vary by hundreds and even thousands of dollars. It’s always important to compare apples with apples. What’s the best rate for the same coverage? With so many insurance companies providing car insurance, odds are you are no currently insured with the company that offers the best rate for your driving profile.

As the New Auto Insurance Reforms are coming into effect as of September 1.2010 it would be wise when your policy renews to shop around and ask for some quotes. Last time when two years ago I did request some quotes I was able to save $400 a year on car insurance premium.

Do you have the tendency to shop around for new quotes at every renewal time? What was the best insurance change you made lately and how much did it saved you in premium?

Related posts:

1. Term Life Insurance

Tags: Financial Knowledge, Personal Finance

This entry was posted by FP on Friday, August 20th, 2010 at 2:55 PM and is filed under Car Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.