For many Americans, milestones towards adulthood and financial independence are the purchase of a home and a car.
Most people, though, don't always consider buying insurance when planning to purchase a new car. Researching tons of providers and choosing a new plan might seem like a tedious task. That said, you could be leaving money on the by staying with the insurance provider with whom you already have a policy.
If you did purchase home and car insurance in the past and have not reevaluated your policies since, now would be a great time to take a look and see if there's a better deal to be had. Shopping for insurance and comparing options is easier than ever by receiving free quotes from PolicyScout.
This brings us to the main circumstances that should prompt you to re-shop for your insurance and find a new provider.
In the interest of narrowing down your options, it might be beneficial to look at bundling together your home and auto insurance policies. Depending on your location, you might find providers offering bundled policies with monthly savings upwards of 20 percent per year.
This varies considerably by state, however, so it's always best to check with the local providers in your area to see how much you might be able to save. You may also save time, money, and hassle by dealing with only one insurance provider and combining your deductible.
Attempting to lower your premium payments is the most apparent reason to revisit the insurance market. Insurance providers will incrementally raise rates over time, especially during renewal periods. These rate increases can occur because the overall price of insurance goes up, an insurance company needs to maintain higher amounts of money in order to pay claims, or if the policyholder has a change in their credit.
It's important to understand what your rates are and why they are increasing. Becoming complacent with your insurance policy may result in paying rates higher than you could find by simply heading back to the market and comparing between providers. It's important to re-shop every year or two to be sure you aren't paying too much in premiums or receiving too little in net coverage.
We've already covered the potential cost savings from pursuing bundled insurance plans. Still, you might be able to find even better deals from shopping around and selecting plans from different providers. For instance, a bundled plan might provide apparent cost savings, but only when factoring in coverage, you don't really need.
Since the initial purchase of home and car insurance can be stressful and tedious, it's not surprising that people tend to sign up for a policy and not double-check later to see whether it still makes the most sense for them.
However, it is vital to keep yourself fully informed about the fine print of your policy. Then you can identify if your existing coverage is sufficient for your current situation. If not, you know it's the right time to wade back into the insurance policy market and look for a better situation.
For example, imagine that you own a home in a forested area on the west coast. Alarmed by the recent rash of wildfires in California, you check your homeowner's insurance policy and find that it would not pay out sufficiently if a fire were to happen in your area, severely damaging your home.
Even then, it's better to consider the risk of climate disasters like wildfires before they start to happen with frequency elsewhere, as providers may not factor such events as strongly into their risk models and consequently offer lower premiums. Other weather events you might consider include earthquakes, hurricanes, tornadoes, or heavy rains that cause flooding.
For your car insurance, if you are looking to add a new driver to your policy, this would be a good time to check your coverage and avoid a significant rate increase by adding another driver.
As much time and care as we may take to select the best policy in the first place, established companies change over time. They may not provide the affordability or level of service you initially received. Conversely, new companies that enter the insurance space may be eager to gain customers and therefore offer market-leading premiums or provide excellent customer service.
Although it can certainly be beneficial to switch providers when you find a compelling reason, the goal remains to find one that offers the most suitable policy for you and hope to be satisfied with the service you receive long into the future. After all, many providers do offer longevity discounts that may knock off 5 to 10 percent based on how long you've maintained a policy with the company. But what about those rate increases we discussed earlier? If a financially stable insurance company is also offering any sort of longevity discount, the benefit of those discounts could balance out potential rate increases in the long run.
Therefore, you should also consider the tradeoff between staying with a policy that offers a longevity discount and a slightly higher premium now versus jumping ship for a lower introductory premium but resetting the longevity counter.
Most Americans never re-shop for home and car insurance, whether because they think it will take too much time or because they imagine they will not qualify for cheaper insurance elsewhere. However, there might be real benefits from heading back to the market to look for lower premiums or better coverage.
If you are looking for home and auto insurance at the same time or you have them on separate policies, you might want to consider bundling your policies with a single provider. This is likely to result in a lower cost and a streamlined claims system, but do keep on top of potentially rising premiums over time and stay aware of your other options.
No matter where you are in your search for home or car insurance, we are sure that you will benefit from PolicyScout's free quotes today. The process is fast, easy, and makes searching for the best plan a breeze.