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Avoid These Costly Errors to Save on Renewal
Car insurance is a necessity for any driver, but it can sometimes feel like a financial burden, especially when it comes time for renewal. If you’ve noticed your car insurance renewal rates keep going up, you’re not alone. There are several factors at play, but one significant contributor is often the mistakes that policyholders make. In this blog post, we’ll delve into the 5 biggest mistakes that can inflate your car insurance renewal rates and, more importantly, how to stop making them.
- Shopping Too Soon & Too Often
In recent years, insurance companies have discovered a metric that shows which customers are costing them money without them ever even having filed a claim.
There’s a calculations that tells them if a customer is not worth the cost of acquisition. Unlike most businesses – insurance companies don’t see all business as good business.
One of the most damaging mistakes people make when it comes to car insurance renewals is jumping ship too soon.
Their is 100% a time to shop your rate but unlike most advice you read online, it isn’t yearly.
Solution: To avoid this mistake, learn when to shop and when to stay put. Mimic the habits of preferred customers to get the best renewal rates. This is a process that over time will cause you to begin paying less and less for your insurance and allow you to maintain and increase your coverage limits.
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- Not Knowing What You’re Paying For
Life happens. Things change. The coverage you had when you first bought your car may not be the coverage you need today.
The most time consuming portion of any insurance agent or brokers day is made up of explaining coverages to their customers.
Coverage’s they’ve been paying for for years! But unfortunately, it’s usually not until a customers rate has sky-rocketed that these conversations take place.
Let me ask you a few questions:
What’s the most expensive coverage on your auto insurance policy? What’s the cheapest?
Do you know what each coverage does?
If the answer to any of these question’s is NO, you’re driving blind (see what I did there).
Take complete control of your rate by taking control of your coverage’s and getting the leverage you need.
Solution: Call your agent or broker and schedule an appointment to dive deep into your policy. If you can’t wait or you don’t think your company is going to be helpful or knowledgeable, I’ve created a guide that breaks down all your coverages, what they do, when to use them and how much they cost from least expensive to the most expensive one.
ALSO READ: How Insurance Companies Make Money: A Simple Guide
- Filing Unnecessary Claims
Not all claims are treated equal.
A collision claim is different from a comprehensive claim. Not only does the TYPE of claim you file matter, but the frequency of your claim filing plays an even more important role in your rates than you think.
Filing claims below your deductible is no-no #1. If your agent or broker is allowing you to do that – you need a new agent or broker. But other than that, the profile of a customer the insurance companies charge the least has surprising information hidden in it when it comes to when they file claims and and how often.
Solution: Before filing a claim, consider the cost of the damage compared to your deductible. If the cost of repairs is only slightly higher than your deductible, it may be more cost-effective to pay out of pocket to avoid the long-term impact on your renewal rates.
Conclusion
Car insurance renewal rates don’t have to be a source of frustration and financial strain. By recognizing and rectifying these 3 big mistakes, you can take control of your car insurance costs and potentially lower your premiums. Remember to not shop too soon, know your what you’re paying for and be selective when filing claims.
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