Auto insurers undercut loyal customers, says Checkbook editor
Kevin Brasler advises drivers to shop for policies every few years, noting that competitors often offer steep discounts to those with clean claims histories.
By Anthony Shevchenko ·
A clean driving record does not guarantee a lower rate from an existing insurer.
Kevin Brasler, editor of Washington Consumers' Checkbook, states that the most effective method for saving money on auto insurance is to shop for new policies regularly. He recommends consumers review their coverage every few years rather than remaining with the same provider indefinitely. Brasler notes that many drivers save $500 or even $1,000 on their home and auto policies simply by comparing offers from different companies.
The practice of staying with a single carrier for years often leads drivers to believe they are being rewarded for their loyalty, especially if they have not filed claims. Brasler explains that this perception is frequently incorrect. Insurance companies share data on policyholders, meaning competitors are aware when a driver has a clean history. This shared information allows rival firms to target long-standing customers with specific offers.
Because other companies know a driver has not filed claims, they are likely to provide a steep discount to win that business. Brasler says these firms are willing to offer rates significantly lower than what the current provider charges to peel customers away from their existing plans. The goal for the new insurer is to earn the business by undercutting the current premium.
Beyond switching providers, Brasler offers specific adjustments to policy structures that can reduce costs. He advises maintaining the highest deductible amount with which a driver is comfortable. For older vehicles, he suggests considering the removal of collision and comprehensive coverage once the car's value drops below $5,000. Drivers should also calculate the cost of raising liability limits, as increasing these amounts is usually inexpensive compared to standard coverage tiers. Finally, ensuring there is no lapse in coverage is essential, as any period without insurance can be used against the driver in future underwriting decisions.
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