Watch TV for more than 30 minutes and you are bound
to see several car insurance commercials that assures you that you can save up to $500 on car insurance. What do you think about that? Do you think that is accurate? If yes, how can you benefit?
Saving big money on auto insurance - marketing hook or real opportunity?
1. The Statistics the Car Insurance Companies Use to Cite Those Numbers Are Different Than What You Would Use to Calculate Differences In Your Premiums Over The Past Few Years
- Car insurance companies use only the statistics for the savings of new customers. Why is that significant? Keep reading.
- Often, customers will switch because they have recently had some tickets or claims drop off. When you are with a company for a while and you have tickets or claims falling off, it will not show that reduced premium until the next renewal date after the three-year timeframe expires.
- Car insurance customers will often start calling around to different companies as soon as their three-year wait is up rather than wait for their new renewal to show a decrease. This gives them a quicker drop in car insurance premiums (try it).
- People also shop around for car insurance when they are much younger, because they are the ones with high rates, typically. Each year of driving experience they get under their belt without tickets or claims will give them lower rates.
- If younger people just started their first insurance policy within six months to a year, they will find the most dramatic decrease in their insurance premiums if they start shopping in that six to twelve month time frame. The current insurance typically cannot drop their rates until their annual renewal.
- If you think about it, these are the people who are switching car insurance and saving a good bit of money. Their cost saving will be significant enough to use in the car insurance commercials.
2. For the Older, Average Car Owner Who Has Maintained a Fairly Decent Driving Record and Maintained Continuous Car Insurance, There Isn’t Much in the Way of Savings When Looking to Switch Car Insurance Carriers
In summary, the average young person can do car insurance shopping and hopping and find some great deals and possibly save a good deal of money on their auto insurance. For the older person who has a perfect driving history and has home and auto with the same carrier, probably not so much. But the rate should be low already, anyways. Try it out, compare.
However, just to keep your insurance company honest, you will want to go ahead and check at least once a year to see if you can do better elsewhere. Just be sure if you are going
to switch, don’t switch down. Make sure you are getting equal or better of a company by checking with A.M. Best or other companies that measure financial stability. It won’t help you to save $500 a year on car insurance when the company goes bankrupt right after you have a house fire that burns your house down with your car in it. Obviously, worse case scenario, but you have to consider these things. If you are going to shave a few dollars a month off your car insurance, upgrade, don’t downgrade.
