There are many ways to deal with rising inflation, but saving money on things you already pay for is a good place to start. For example, a new survey shows that shopping around for a better rate on car insurance almost always pays off.
The survey by ValuePenguin shows that 92% of consumers who switched to another company saved money.
“This impact was limited, however, as 65% of policyholders didn’t seek additional quotes during their renewal period,” the authors write, suggesting that they might have saved more if they did more legwork.
Even so, some of the savings were substantial. The survey found that 26% of those who recently switched to a new insurer saved $200 or more per year.
If you haven’t shopped around, chances are you are paying more than you should. The survey found that nearly 40% of auto insurance policyholders saw their rates increase during their most recent renewal period. According to ValuePenguin’s "State of Auto Insurance," rates were expected to increase by an average of 0.6% across the U.S. in 2022.
There can be many reasons for that, but one of them may be something called “rate optimization.” In the past, some car insurance companies have slowly raised the rate on their long-time customers because they believe these people won't shop around.
Jacqueline, of Queens, N.Y., told us she started shopping for a new provider when her Geico bill began to go up.
“They increase insurance rates rather than drop them for long-term customers,” Jacqueline wrote in a recent ConsumerAffairs review. “I am shopping around now to get the best deal because Geico is super expensive compared to other auto insurance companies. I have a good driving record and do not see the benefit.”
For consumers who want to lower their car insurance bills, ConsumerAffairs has compiled some helpful advice here. The first thing we suggest is getting multiple quotes. You may be surprised at how the rates vary.
How to lower your bill
Another thing consumers should do is determine how much and what coverage they need. Liberty Mutal has incorporated this into its marketing strategy with the tagline “only pay for what you need.” However, nearly all insurance companies now tailor policies to customer needs.
Many insurance companies offer a number of discounts, including safe driver discounts. When pricing a policy, ask what discounts are available. They may also offer lower prices when you bundle insurance policies. If you are a homeowner, it probably pays to have your homeowners insurance and car insurance with the same company.
Consumers should also consider raising their deductible – the amount of money you will pay for a covered repair before the insurance kicks in. If you have ample savings and are willing to take on more risk yourself, you can save money each month by raising your deductible from $500 to $1,000.
Finally, all consumers should take steps to raise your credit score. That’s one of the factors car insurance companies consider when they set rates. Paying all of your bills on time every month is the best and easiest way to raise your credit score and it will probably result in a more attractive rate on car insurance.