You may not realize it, but automatically renewing your auto insurance policy every year with no questions asked may be costing you money. Sure, it’s so much easier to let your auto insurance company take control and just renew your policy when it’s due. After all, your insurer has your best interests at heart, right? Well…maybe not. Many insurance companies count on their customers’ automatic acceptance of what’s on the printed page to charge them pretty much anything they want.
If you’ve gone through the experience of searching the Internet for automobile insurance, chances are you’re not be in any big hurry to do it again. Furthermore, you may figure that, because you’ve stuck with your insurer for quite some time, he’s taking care of you. Don’t assume that’s the case. Check to make sure they believe in loyalty as much as you do.
Research shows that an estimated 9 million (27 percent) of drivers tend to stay with their current insurance policies, using automatic renewal. That means, at the end of the policy period, the policy simply renews itself…often with additional charges or an increase.
Additional studies indicate that approximately 39 percent of U.S. drivers have been with the same auto insurance company for at least three years. Another 5 percent have been with their provider for 10 years or longer. Interestingly, the number of policyholders who check their renewal rates before renewing their policy was less than half – at 45 percent. Even fewer drivers, 24 percent, cared enough about what they were paying to bother checking any changes in coverage or the policy itself for discrepancies that could cost them money.
When asked why they chose to renew their auto insurance automatically, 26 percent of respondents said they believed that their current insurer was providing them with a good deal and would continue to do so. Loyalty also played an important part in the survey with 29 percent assuming that staying loyal to their provider would get them a better deal. While 16 percent didn’t want to go through the ordeal of finding a new provider or checking up on their current one, 13 percent found the entire process too much of a hassle and felt they weren’t knowledgeable enough to make an effective cost-saving switch.
Some of the most common reasons for not switching providers or checking up on policy changes before renewing appear to be attributed to unwillingness to make an effort or lack of knowledge – which can end up costing drivers a decent amount of money on their premiums. Often, the coverage may provide inadequate protection in the event of a serious accident.
Similarly, certain items may be lacking from the policy, believed to be included, such as rental car reimbursement coverage, towing service, and various money-saving discounts. Also, your vehicle may be insured for only its actual cash value, as opposed to its actual replacement value, which is preferable. So, don’t take for granted your auto insurance company is automatically giving you the best deal out there just because they like you.
Dig deeper – even if you choose to renew your insurance this way, at least, give it a quick glance when you receive your auto policy declaration. Then, you’ll have a better idea of how far your insurer is willing to go to keep you as a customer.
Never take anything for granted, especially when it comes to your premiums. Make sure you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?
How long have you been with your auto insurance company? Feel free to share your thoughts in the comments section below.