If you ask any financial advisor about the biggest insurance mistakes consumers make, they will tell you that a surprising fact: loyalty can cost you in the long run.
Many insurance companies give their clients loyalty discounts to influence them to stay with them, but rate increases can counteract the savings.
The best thing that consumers can do to keep their insurance expenses low is shop around on a regular basis.
There are several different ways that you can shop around when you’re ready to see if you’re really paying too much for your coverage.
Consumers who value their time have started using comparison sites because of how convenient they are, but not all companies are on these sites.
Why not compare auto insurance quotes today?
Why do consumers need to shop around?
Insurance rates can change from year to year. Some carriers keep their operating expenses low and in turn keep their insurance rates low.
Other carriers have to file for rate increases through the state each and every year to combat rising operating costs or bad investment decisions. These reasons are why rates can differ dramatically.
You may be paying close to the state’s average premium for your coverage with one carrier and then close to double that rate with another.
It all depends on how the insurer handles its finances and what segment of the market the carrier is targeting. If you compare rates, you’ll be able to find the carrier that’s doing the best business and offering you the best rates.
Why are comparison shopping sites so popular?
There are hundreds of different auto insurance companies that do business in each state. You can easily find a list of the licensed carriers that operate in your state by visiting the Department of Insurance website.
Since there are so many different options, and contacting each of the options directly would take forever, comparison shopping sites have become a convenient alternative.
If you use a comparison site to get your quotes, you don’t have to provide your information multiple times to get dozens of quotes.
You simply enter all of the information that you need to provide into the quoting fields, and you’ll be directed to actual quotes from actual companies. You don’t pay a fee for the quotes and you save a great deal of time.
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Companies with Low Marketing Budgets Don’t Promote on Sites
The major insurance companies have virtually an unlimited budget when it comes to marketing their auto rates.
They will advertise in the following ways:
- air commercials on just national television
- purchase banners
- solicit the services of comparison sites
The smaller companies have very restrictive budgets that limit their marketing strategy options.
There are two ways that comparison sites make money. They will allow companies to advertise with banners on their site and they will charge insurers to deliver quotes to visitors.
It’s possible that the insurer will pay a fixed fee for quote delivery or a commission when a client purchases a policy after comparing quotes on the site.
Since not all companies can afford the fees, you might not be able to get quotes from all carriers on each site.
How can you get quotes from carriers that aren’t on sites?
If you’ve already run your information through a comparison tool and you want quotes from a few smaller companies that don’t advertise there, you can put the quotes aside and solicit quotes from the carrier directly.
There are few ways that you can get quotes from these companies. Here are some ways to contact the companies:
- Call the company’s toll-free number to speak with a licensed sales agent 24 hours a day
- Call an agent that exclusively sells the company’s products to discuss coverage options over the phone
- Visit a local agency and solicit quotes in person while you sit with a sale agent
- Request a quote via email by sending a local agent your quote request
- Visit the company’s website and get a quote via the official quoting tool
What should you do before you get quotes from smaller carriers?
Insurance isn’t always one-size-fits-all and size doesn’t always matter when it comes to an insurance carrier’s market share.
While the carriers that hold the biggest share of the market are typically well trusted, a company can hold a small chunk of the market and still deserve your business.
It’s your job to compare companies before you ever compare premiums. It’s best that you look up some facts about all companies, no matter the size so that you don’t make any mistakes.
Here are some of the qualities that are important:
- Financial stability grades through AM Best and Moody’s will help you assess financial strength
- Licensing status through the state
- Complaint index through the National Association of Insurance Commissioners
- Consumer satisfaction ratings through different consumer agencies like JD Power & Associates
- Insurance product offerings through the company and special policy features
How often should you shop around for a new policy?
You should shop around for insurance on a regular basis. It’s in your best interest to at least compare rates each and every renewal so that you can dictate whether or not you’re paying too much for your current policy.
If at any time during your term you feel like your rates are too high, you can shop and see if making the switch makes sense.
You’ll have to decide how you want to solicit quotes as you compare rates every term. It’s best to start with our comparison tool first to get an idea of how much the market will charge you.
After you’ve done this comparison, you can seek out additional quotes if you haven’t found the deal from the carrier you like most.