Time to Reshop Your Home and Auto Insurance
The talking lizard from Geico and perky Flo from Progressive claim that switching insurance companies and bundling policies can save you money. And that’s generally true: Shopping around for a new homeowners or auto insurance policy may save you hundreds of dollars. And if you bundle your policies with one insurer, your savings could increase even more. Bundlers are likely to save 17% on insurance premiums, on average, or $730 a year, according to Ashlee Tilford, managing editor at Insurance.com, an insurance shopping and comparison website. In some cases, bundling could cut your premiums by up to 35%.
However, inertia prevents many consumers from taking advantage of these potential discounts. Roughly one-third of individuals with home or auto insurance haven’t reshopped their policy for better coverage and lower premiums, according to insurance comparison website Policygenius. And while loyalty may get you some brownie points with your insurer, those points may not be worth much money.
“It’s the loyal customers who get clobbered most of the time,” says Bob Hunter, director of insurance for the Consumer Federation of America, an advocacy group. “They get a 5% or 10% discount for being loyal, but over time, their premium has gone up maybe 25% to 30% because they don’t shop.” In industry terms, identifying customers who are unlikely to shop around and charging them higher rates is called price optimization, and it’s currently banned in 19 states and the District of Columbia.
To know that you’re getting the best price—and
