Health & Fitness
Should I stay or should I shop: Is there really a benefit to being loyal?
Are you facing rising auto or homeowners insurance rates, but hesitant about considering other carriers? There are several factors to consider in deciding whether or not to make the jump.
When it comes to selecting insurance, the driving force is more often than not cost. Some will shop for specific coverages, some for great claim service, and some won’t shop at all because their cousin is their insurance agent and it would make for an awkward Thanksgiving.
But I’ve been getting calls from people lately who tell me they’ve been with the same insurance carrier for 15 years and the rates have been rising annually of late. Some haven’t heard from their agent for years and feel taken for granted.
With rising rates currently, many people are considering shopping their policies out either through other carriers directly, or through brokers who have access to multiple carriers.
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While the urge to shop certainly has merits and obvious potential gains, is there a benefit to being loyal?
The answer is two-sided. While most carriers offer longevity discounts or “accident forgiveness” type incentives, the cost savings of switching may outweigh those benefits, at least at face value. Accident Forgiveness only benefits the insured when they have an accident. That’s not usually the situation when they are considering shopping insurance. The premium reduction offered by a new carrier may be seductive, but the consumer should weigh their situation carefully on a cost savings versus coverage offerings analysis.
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If you’ve had a couple of claims, either on auto or homeowners, you may want to stay put for a while, especially if you have a good relationship with your agent. Most carriers have stricter underwriting guidelines for new business than they do
with existing business, so you’re more likely to qualify for continued coverage
with your current carrier than to make it past the underwriting gauntlet with a
new carrier. This is underscored if you’ve got a 16-year-old getting his license.
But outside that type of situation, there’s certainly no harm in getting a quote. In
fact, it’s wise to have a trusted professional review your coverages every few
years, even if it’s your current broker. So my advice is this: loyalty works only when there’s a two-way street and your agent/carrier has served you well.
Ann Miller, Sales Representative
Redmer Insurance Group
Home Office in Phoenix; main office in White Marsh
410-336-0760 direct
