Insurance rates are on the rise. Be wise.
Working in the insurance industry has thought me many things, but one thing indefinite; insurance rates will never go down. If anyone ever tells you otherwise, they are lying.
Many consumers are unaware of the few things that impact their eligibility and rating with insurance companies. While this applies to all, I would like to focus on Automobile Insurance as it is most often shopped coverage.
No one can guarantee your rates, but you have some control over many of the factors that determine your final price. Your driving record, where you live, what car you drive are just a couple of them, but those you probably already know about.
1.Do not shop online!
Online quoting systems which offer you to find your rates from multiple carriers are only collecting your information. You are not going to save time or money this way. Instead, you will develop a long-lasting headache, anxiety, and lifetime hatred towards any insurance salesman that will come in your path. Your information submitted online is being sold as a “lead’ to participating insurance agents and since they paid for the information, they will be persistent.
If you’re lucky, you will receive a generic quote that will look too good to be true, but in most cases, the call and emails will pour from by hundreds of local representatives trying to get your business which can be very overwhelming. Those calls can last up to 60 days and will make you want to change your number, change your email and hide under the rock for a while. That does not mean you should not inquire online for a quote. Go directly to the source; the company website.
2. Talk to live person-ask questions!
Chose reputable, standard carriers that offer multiple products. Combining your Auto with Renters or Homeowners insurance can save you more money, and ask questions about anything you may not understand. While many seem to think that finding cheap insurance is better, think again. Some carriers out there offer coverage only for you to be legal with the state required liability limits but have their own limits on what they will pay out if you were in a collision. Ask for, and read their policy coverage and disclosures before committing to a non-standard company.
3. Avoid anonymous quotes!
When providing your information to a representative, make sure to have the correct details for all household members and/or drivers you want to include. This will not only speed up the process but will also assure you are getting an exact rate and most likely lower than the one generated otherwise. In many cases, shoppers are afraid of providing the correct address, or date of birth which only concludes in inaccurate and higher quote.
Insurance companies are using your prior driving experience, your longevity with an existing insurance carrier and overall ‘insurance score” that is generated from multiple factors provided by LexisNexis and TransUnion. They have a higher, ‘no-hit’ rating for those who never had insurance or they cannot obtain any activity in insurance rating world, so making up information or not providing it is defeating your purpose of shopping altogether.
4. Apples and oranges.
You cannot compare your rate to anyone else. There is no ‘ballpark figure” that applies to your age group, your zip code, the type of the vehicle you drive, or the kind of home you live in. Each and every quote you receive is generated based on your own, personal experience and insurance score. Some refer to it as a credit score, but in fact, it is an “insurance rating”, and while your score is based on multiple factors generated from your credit, the actual credit score is not being revealed to anyone and is considered as a ‘soft’ inquiry.
( I do not recommend, however, shopping insurance rates with multiple carriers just prior to obtaining a mortgage, as all inquiries, including soft ones, may be taken into consideration while evaluating your loan eligibility)
5. Shake hands.
While face to face relationship with Insurance representative may seem a little intimidating, or even embarrassing if your driving history isn’t that great, it is in your advantage to be able to have someone evaluate your risk and know your situation. Insurance representatives are more open to assisting you with any problems, late pays, or coverage adjustments when you have that personal connection. (That is not to discourage you from placing your business with an online-only company, but take in consideration that customer service is just as important as rates you are seeking).
Never cancel your current policy until you have approved rate from another company and made your first payment. If your quote has not been properly estimated, you may commit to a policy that will change your rate after you sign up and which may not be in your favor. Having so much as a day of a lapse in coverage may change your eligibility and rate.
Why are insurance rates increasing?
Insurance companies are increasing rates to compensate for the loss of profits. There are multiple factors that contribute to insurance pricing and it can affect everyone. Medical cost, repair cost, uninsured motorists, insurance fraud, late payments, more miles are driven, new technology and cost of vehicle alone are just a few of the reasons we pay more for insurance.
My personal recommendation is to always talk to your representative about the possibility of additional discounts, coverage adjustments or policy review just to make sure you are getting the coverage you need, and that all your discounts are in place. On many occasions, insurance companies issue new product you may qualify for.
Before you decide to shop around, take time to go over your current policy with details. Don’t be afraid to ask questions and inquire about ways to reduce your premium. Chances are, if your company raised rates, so did the others. If they haven’t yet, they will in near future.
Your loyalty to one company can be rewarded more often if you stay longer with that carrier. Each individual case is different and may not apply to some, but often you will find that you can still save money by making a phone call to your agency.