4 Reasons I Get Insurance Quotes Every Year
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Each year, I take the time to get new insurance quotes for home and auto insurance. It only takes around 30 to 45 minutes to go through this process, and I feel like it's well worth it to help keep my personal finances in order.
Here are four big reasons why I think the time and effort I spend shopping around for insurance pays off.
1. My insurer might charge me more if I don't shop around
Insurance companies engage in price optimization and actually have algorithms that aim to determine who is likely to compare price quotes.
Policyholders who the insurer believes are unlikely to switch to a different company based on price end up being charged more in many situations. I don't want to be penalized for inaction, so I make sure I shop around and confirm that my insurer isn't charging me more than it should for the coverage I have.
2. New insurance coverage options may have become available
The insurance market isn't stagnant. New companies come on the market or existing businesses change their offerings. What was once the cheapest insurance company may no longer provide the best price over time. Different insurers may also offer new and different types of protection that I want to take advantage of -- but I can only find that out if I shop around and explore what's out there.
3. I want to be sure I'm paying rock-bottom prices
It's important to me to have comprehensive insurance coverage in order to protect my assets. As a result, I buy more insurance than necessary. I also have multiple insurance policies as we have two homes, a business property, and two vehicles. So I spend a lot of money on insurance premiums every year.
I don't want to spend more than is necessary to get the coverage I need, so I get quotes each year because I want to make sure I'm paying the most affordable price possible for my policies -- without compromising on quality.
I can only do that by comparing prices regularly to see what different insurance companies will charge me for the coverage I need. I also know that changes to my life circumstances, such as getting older, may impact my prices, and different companies may charge more or less for people in different demographic groups.
4. It gives me an opportunity to re-evaluate my coverage needs
When I get insurance quotes, I have to specify the exact amount of coverage I want as well as the types of insurance I am interested in purchasing.
This forces me to re-evaluate my coverage needs and make sure I do not have too much or too little protection. I can also think about what I want my deductible to be, based on the amount of money in my emergency fund as well as the risk of something going wrong in the upcoming year.
The bottom line is, shopping around for auto and home insurance quotes each year helps me to make sure I don't overpay, don't have too much or too little coverage, and am working with an insurer that earns my business. I only have to do it once every 12 months, and the money it has saved and the peace of mind that the process provides makes it well worth the minimal effort.
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