Drivers must have auto insurance in most states. As a result, for most Americans, auto insurance is an essential purchase. It can also be an expensive cost to add to monthly budgets.
The good news is that there are ways to lower the cost of coverage. And for those drivers who don’t want to pay more than what is needed to insure their vehicle, there are three good reasons that shopping around at least once a year for insurance could really pay off.
Here is what they are.
1. Insurers may charge more for drivers who don’t shop
Some auto insurance companies engage in a practice called “price optimization”. While it is not permitted in all places in the United States, it is permitted in many states.
Optimizing prices allows insurance companies to consider certain factors when setting auto insurance premiums, even if they have nothing to do with a driver’s risk of collision.
When auto insurance companies are allowed to engage in this pricing practice, they often evaluate a lot of personal data to determine the likelihood of someone shopping and comparing auto insurance quotes. If they think you’re not likely to shop around and consider switching companies, they may charge more.
Drivers shouldn’t end up with a very high bill just because they were loyal to their auto insurer. So be sure to get quotes at least once a year from other insurers to see if any good deals are missing.
2. Motorists can save money if they change insurer
Even if an insurer doesn’t charge an additional cost because they think someone is going to stay, it is possible to find cheap auto insurance while shopping. As you get older and your circumstances change, you may be able to find more affordable coverage from another insurer.
If you can lower your premiums while still maintaining the same level of coverage, that just means more money in your pocket. It only takes a few minutes to get insurance quotes online and see if you can save. Lower premiums paid month after month may be worth the time.
3. Drivers might be able to get more comprehensive coverage
Coverage options vary from insurer to insurer. By shopping at least once a year for different policy options, drivers may find that another insurer offers better auto insurance coverage.
For example, some insurance companies allow new car replacement coverage to apply only to vehicles of the most recent two model years, while others provide this coverage for three or four years after the purchase of a new vehicle. This coverage ensures that drivers can get a new, comparable car if their vehicle has been totaled – rather than just receiving depreciated value.
Ultimately, shopping for auto insurance at least once a year can save money in a number of different ways, and drivers have nothing to lose by doing so. So start comparing insurance quotes today.
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