Why It’s Important to Shop Around for InsuranceOctober 12, 2021
Every year is slightly different than the year before. This might seem like a silly observation, but little things change all the time. A new car, a new house, and a new job are all big changes, but they happen all the time. Children are born, kids grow up, and life is just a little different every year. Insurance policies are written for short terms, often only six months or a year. The policies then auto-renew, without full consideration to life’s changes.
If your life is different now than it was the year before, how can you be sure that your insurance policy is still the right fit for your needs? Duliban Insurance understands this dynamic of changing needs and knows the competitive nature of the insurance industry.
When Should I Shop Around for Insurance?
An insurance policy is written for a specified term and is only valid for that specific period of time. As a convenience, the insurance will often auto-renew using the information on file. There are many small changes, though, that may or may not have been recorded by your insurance company.
The best time to shop around is before your insurance policy term ends, but the best time to switch is exactly when the term ends. This means that you should start shopping a couple of months before your policy term expires. If you find a better policy, then you should plan for the transition on the day your existing policy expires, to ensure there are no gaps in coverage.
Reasons to Shop for Insurance
The automatic renewing function of an insurance policy is a nice convenience. Adults living busy lives reasonably rely on convenient automation services to make everyday life easier. Things like automatic payment options lower stress levels by reducing the amount of mental energy necessary to maintain finances. The resistance to shopping around for insurance is reasonable, but the risk to relying on this convenience may mean that you no longer have the right insurance plan for your current needs, or you may be paying more than you should for insurance.
Here are some instances when you should consider shopping for new insurance:
- Getting married
- Getting divorced
- Buying a new home
- Buying a new car
- Buying a boat
- New art or jewelry purchase
- Family addition
- New teenage driver
- New job
- You filed a claim within the last year
This list is not meant to be exhaustive. Nonetheless, any life changes or significant financial changes could warrant shopping for a new insurance policy.
Types of Insurance Discounts
Insurers offer discounts, or incentives to attract and retain customers. These companies compete for the most and the best customers. Some potential discounts include:
- Combined home and auto discount
- Multi-vehicle discount
- Paid in full discount
- Automatic payment discount (Electronic Funds Transfer)
- Good driver discount
- New vehicle discount
Shopping for a new insurance policy will not guarantee decreased insurance rates. Sometimes, however, your current company may offer the best rates for your needs. Some companies even offer loyalty discounts for returning customers.
Auto insurance rates are based on several factors. Things such as the year, make, and model of your vehicle can affect its price, but so can the people who live with you and drive the insured vehicle. Vehicles with effective theft deterrent measures are usually cheaper to insure. Your neighborhood can also impact your premium. One 2011 statistic showed that the average claim per vehicle in one city was as much as 25% higher than a neighboring city.
Insurance companies may charge different rates for different risk factors. Here are some tips to help you find the best auto insurance rates:
- Consider a higher deductible
- Take a defensive driving course
- Build a good driving history
- Consider enrolling in an insurance telematics program
- Buy newer vehicles with safety features
- Consider setting up auto pay or payment reminders to avoid late payments.
While higher liability limits may also result in higher insurance rates, you should avoid insurance policies that offer minimal liability limits. Consider consistently carrying $200,000 as the minimal amount of liability coverage.
Home insurance rates can vary based on region, home type, and several other factors. Home insurance options can be adaptable to houses, condominiums, and for tenants. Home-based businesses are becoming more popular, but if you do have a home-based business, you are required to report your home business to your home insurance company.
Home insurance policy prices vary based on the type of policy purchased.
- Comprehensive: A comprehensive policy provides the most home insurance coverage. A comprehensive policy covers all risks to a home and its contents. This can also be called an all-perils policy.
- Standard: A standard policy is a step down from a comprehensive policy. It covers the risks to a home and its contents if they are named in the policy. This can also be called a basic or named-perils policy.
- Broad: A broad policy provides a level of coverage that is between comprehensive and standard policies. A broad policy covers all risks to the home, but will cover only named risks for contents coverage.
- No-frills: A no-frills policy provides the least amount of coverage. It offers basic coverage for homes.
The prices can vary based on the type of policy, but additional factors can also impact premiums, such as:
- The type of residence
- Age, size, and location of the home
- Value of property and its contents
- Claim history
- Amount of deductible
Small Business Insurance
Home-based businesses and small businesses benefit from shopping around for insurance policies as well. The different types of business insurance coverage can benefit from fraud prevention and risk management.
The Duliban Hometown Advantage
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