If you have not shopped around for new auto insurance, then the answer is likely ‘yes’ you are paying too much for insurance. People quite often stay with the insurance carriers because they are either too busy/lazy to change companies or they are too loyal. In my opinion, loyalty is the worst reason to stay with an auto insurance carrier in Florida. Why? Go get three moving violations and see how fast they drop you after being with them for 20 years and no tickets. Trust me, shop around and if they have the best price, stay. Otherwise, change companies even if you have to do every year.
Consumer Reports’ latest car insurance survey of more than 90,000 CR members found that seven car insurance companies lost at least 20% of their customers over a recent five-year period. Those companies are:
- Farmers Insurance: 27% of customers lost;
- The Hartford: 27%;
- Liberty Mutual Insurance: 27%;
- Nationwide: 26%;
- Allstate: 23%;
- Progressive: 21%;
- Travelers: 20%;
Meanwhile, other insurance companies appear to generate more loyalty. For example, USAA lost just 2% of its customers over that five-year period. Amica (6%), State Farm (12%) and Geico (18%) also lost relatively low levels of customers.
Why Do Customers Leave Their Car Insurance Company?
Money is the biggest reason to leave an auto insurance carrier. According to the survey, 62% switched insurers because another company offered better rates or for rate hikes.
By contrast, less than 10% of customers cited nonfinancial reasons such as following recommendations of family and friends or having problems with an insurer’s honesty or level of courtesy.
But make sure you are comparing ‘apples-to-apples’ and not dropping certain valuable coverage just to save a buck. Insurance coverage like Uninsured Motorist is vital and should never be dropped.
How Often Should I Shop for New Car Insurance?
Try to shop for new auto insurance every year or two. If you don’t regularly shop for car insurance, you’re probably making a mistake. As Consumer Reports notes:
‘Among the 22 percent of Consumer Reports members who told us they’d switched insurers in the past five years, 62 percent said they’d found a better price. And 77 percent of those who switched said they were highly satisfied with their new carrier.’
When I was a newlywed and money was extremely tight as both my wife and I had just graduated from law school, I shopped every six months when it came up for renewal. Much to the frustration of my wife because she never really knew who our auto insurance carrier was, we saved anywhere from $80 to $200 per 6 months. Three years later, after no claims ever being filed, our insurance coverage was cheaper for two cars than it was for one car three years earlier. Twice the insurance carrier kept our business because I found a cheaper carrier and they wanted to keep my business so they cut their prices to beat the competition.
How Do I Shop for New Car Insurance?
You could call all of the insurance carriers or go online, but that is time-consuming. If you don’t have the time or knowledge, you might want to consider letting a third party like Gabi or The Zebra gather quotes from auto insurers for you. I, however, like having the same human take care of me and that will look out for me. I, therefore, like shopping with auto insurance brokers that will bundle my home with my car for even more savings. Brokers like AAA or Adrian Fernandez Insurance are local and will shop several companies at the same time and will streamline the car insurance shopping process.
How Much Auto Insurance Coverage Should I Buy?
You should buy as much as your household income in order to properly protect yourself and your family. I know that sounds like a lot and you are probably thinking this Tampa auto accident lawyer is trying to make you buy more insurance than you need. But that is not true. You buy auto insurance hoping you never need to use it. Frankly, the insurance companies are hoping you never need to use them either as they make more money never paying claims.
So, how much is enough? This is what I recommend:
- Bodily Injury coverage – buy this equivalent to the household income. This protects you if you are at-fault for the accident. If a husband and wife make $75,000 per year together, buy a $50,000 per person/$100,000 per accident coverage ideally or more. Are expenses too tight? Shop around but do not buy less $25,000 per person/$50,000 per accident. You will be on the hook personally for anything above those limits and that would likely bankrupt you.
- Underinsured Motorist coverage – again – equivalent to the household income. Chances are that if you are reading this article, you will not be at-fault in an accident but are likely to be the victim of an accident. The at-fault party may not have insurance or enough insurance and just like you cannot get blood out of a turnip, you cannot get money out of somebody who does not have money. For example, if you owed me $1 million, no matter how much I beat you, slap you, or throw you against the wall, you will never pay me $1 million. The same is true here.
Out of all of the insurance coverage, this is usually the cheapest to buy – dollar per dollar and it is the most important as it follows you wherever you and your family members go and will pay you for lost wages, medical bills, pain, and suffering, loss of quality of life, loss of consortium, etc.
- Personal Injury Protection and Property Damage – mandatory coverage. This is the only coverage this mandatory.
- Comprehensive and Collision – make these deductibles $1,000. Why? If it is less than $1,000 it is better to pay in cash and not file a claim. Trust me, your rates will go up if you do file a claim. Also, if you do not file a claim, then nobody sends a damage report to CarFax.com
Remember, insurance companies are in the ‘risk business’ and they never lose. Therefore, shop around and buy enough coverage hoping never to use it.
These are solely my opinions and I am sure there are people out there that will disagree, but they usually have an agenda. I don’t. I just hate seeing people waste money or not properly protect themselves.
If you have been injured in a Tampa car accident, call Tampa Injury Attorney Martin Hernandez at 813.755.9500.