If you’ve changed insurers or even complained about your rate, companies may charge you less than a nonshopper.
It makes sense to shop for auto insurance every year or so. You may find a better deal, and just looking like a smart shopper may help you get a lower rate.
Many insurers have started using a practice called price optimization, which uses personal consumer data to measure how likely you are to compare prices and how much of a price hike you’d be willing to accept without switching insurers. If you’ve changed insurers or even complained to your insurer about your rate in the past, companies (including your own) may charge you less than a nonshopper, says Robert Hunter, director of insurance for the Consumer Federation of America. The CFA has asked state insurance commissioners to ban the practice as unfair because it bases rates on criteria other than the risk that you will have a claim. Maryland is the only state to ban the practice so far.
Insurers do not make this practice public, so you won’t know whether it affects you. But either way, it’s a good idea to shop around. Hunter says he recently saved hundreds of dollars by getting price quotes from several companies and then asking whether his current insurer would match the lowest quote (it did). “If you’re a good driver and have had the policy for a long time, your insurer probably wants to keep you,” he says.
Get price quotes by calling insurers, going to their Web sites, or using a site that provides quotes from several insurers, such as www.carinsurance.com or www.bankrate.com. Or find an independent agent at www.trustedchoice.com.
Dig out your current policy to see how much you pay every six months, as well as the limits and cost of each coverage. Also have your vehicle identification number (VIN), current mileage and as much information as possible about recent claims or moving violations. You may not find a better rate if you’ve had an accident or a moving violation within the past three to five years.
Go to CarInsurance.com and enter your information (with the same coverage your policy currently provides). In most states, you’ll get immediate quotes online from several insurers, such as Esurance, 21st Century and The Hartford. Also get quotes directly from the largest insurers: Allstate, Geico, Progressive and State Farm. If you’d rather have an independent agent shop for you, go to TrustedChoice.com.
At www.naic.org/cis, check the closed complaint records for your insurer and the two or three companies with the best quotes. Finding the complaint ratio can be a hassle, but you don’t want to risk headaches if you have a claim. As long as the ratio is close to the national median (which is 1.00), you’re good to go. Call your insurer and explain that you’ve found a better rate. If it won’t lower your premium, make the switch to the company with the lowest rates and fewest complaints.
You can save hundreds of dollars on your premium.