How often should you shop insurance?
It’s no secret that prices change all of the time. Insurance carriers are no stranger to rate increases as time goes on. You might’ve gotten a great rate with a company years ago, and think that’s the best it’s going to get, so you stick with what you know. You’re generally okay with how things have been going. But is that always the case? The simple answer is : no.
Just like you’ve probably played the cable game where you switch carriers every couple of years, the same is generally recommended for insurance policies to get the most bang for your buck.
We don’t recommend shopping around every six months to a year when things make a slight change at renewal. Why? Because no carrier is a stranger to rate increases. There is a line that our parents said, “When I was a kid bread cost 25c a loaf”, and they reminisced about what’s changed. Well, of course things have changed! In times when prices are rising, you can expect that to generally be a blanket statement. It’d happen regardless of what baker you go to for your bread. But, a couple years later, and those bakers might’ve adapted a little differently to the changing market.
When it comes to auto, home, and umbrella policies, the rule of thumb is you should double check your rate every three to six years. Chances are, there’s another company out there that can offer the same coverages, or better, for a lower price. Why? Because as policyholders flock to the cheaper carriers, that carrier may then experience a higher loss-ratio. A higher loss ratio means they’re losing more money than they typically would from claims, so how do they counter that? By raising the premiums to recoup some of the losses for a particular area. Another carrier might be trying to drive more traffic to them, and haven’t had to cover too many claims in a few years, so they offer a deal, a special, or a discount.
When it comes to insurance, it’s a lot like bread. The differences aren’t just between white and wheat. There’s so many different types, so many different brands, and so many different grocery-stores to buy from.
The easiest way to shop your policies right is to work with an agency that knows how the market works, and understands that while one carrier may be right for you now, another may be better for you later. At the Ondik Insurance Agency, we work with over 80 carriers. While we do the shopping, you enjoy the savings. We might even be able to get you some jam for that bread!
