Shopping the insurance market for auto and home coverage periodically can save you big bucks.
I read in The New York Times about a fellow who got a quote for auto insurance from a competing insurer out of the blue. The competitor offered a premium for the same coverage he already had, only it was almost exactly half of what he was currently paying!
So he calls his existing insurer to ask why they’re twice as much money. The answer he got was kind of a shrug of the shoulders as if to say, ‘Because you never asked for a lower premium….’
Then they came back with a quote that was even cheaper than the offer that came out of the blue. The man went from paying $2,537 for two cars to paying $1,200 without even having to change insurers.
Over time, one of the most unusual facets of American capitalism is that companies have moved from rewarding our loyalty as customers to penalizing it. With insurance, if you don’t reshop it from time to time, you’ll end up missing opportunities to save elsewhere.
Sub-brands within brands can save you money
Some 30 years ago, I read something about how certain insurers have different sub-brands within the main brand. This is now very common in auto insurance.
The example in the article I read was about the company I had insurance with at the time. So I called my agent and asked if I could switch to this cheaper sub-brand. He checked — this was before the era of computers — and called back a few days later saying I could and that my premium would drop by about 60%. I was stunned.
All too often, we are so bored by insurance that we don’t focus on it enough even though it is so expensive.
Allstate poised to raise homeowner premiums
Meanwhile, The Chicago Tribune reports Allstate is poised to jack insurance rates in an effort to triple their profit level.
They’ve already gotten approval to increase premiums for home insurance by 8% in 17 states and this is just early innings. If you are Allstate insured, it’s very much to your advantage to shop the marketplace.
By the way, when you’re talking about insurance, you’re not just concerned with the premium, but also with the quality of the company. Year after year, USAA and Amica Mutual both prove themselves to be at the top of the heap among insurers.