It seems nearly impossible to switch on a television or click onto the Internet without being subjected to a barrage of ads beckoning viewers to switch their car insurance carriers. But it seems consumers may finally be falling numb to the pitch, as the number of drivers shopping for auto coverage has dropped to a four-year low. That’s according to the just-released Auto Insurance Shopping Index compiled by the global information solutions company TransUnion.
The downtick is significant, but it’s hardly a free-fall, however. TransUnion determined that 20% of consumers shopped for car insurance, which is down from its peak of 22.6% in 2015, and is at its lowest rate since 2012.
This is no doubt in part because viewers could just be tired of the constant nagging to find a better deal on insurance rates, but TransUnion vice president of insurance solutions David Drotos likewise points to a decline in ad spending by major carriers, citing a 2017 report by SNL financial that found the industry spent 1.6% less in ad dollars during the prior year.
You did notice that decrease, didn’t you?
“We believe that rising accident frequency in recent years, due in part to distracted driving, has led carriers to reduce their advertising spend as they adjust rates to account for their increases in loss,” Drotos explains.
Still, shopping around among competing carriers is the easiest way to lower your auto insurance rates. Simply spending an hour calling three or four agents could save hundreds of dollars a year. That’s because the so-called actuarial formulas used to compute car insurance rates are moving targets that can vary significantly among companies, with some charging more or less to cover the cost of what’s perceived to be additional risk.
For example, according to a 2017 analysis conducted by Consumer Reports, a driver living in Pennsylvania with one at-fault accident on his or her record can save more than $1,050 a year by switching from Allstate to Erie, Nationwide, or State Farm. A driver living in New York who’s received a single moving violation can save about $800 by switching from Liberty Mutual to Progressive.
And if you’ve recently changed addresses, gotten married or divorced, added one or more teen drivers to your policy, or either your driving record or credit rating has changed for better or worse during the past year, your risk factors have changed in the eyes of insurers and it's imperative to take the time to determine which carrier will subsequently charge the lowest rates for coverage.
CR says having a poor credit history will boost rates by as much as $2,090 a year, while adding a teen driver to a policy will cause premiums to jump by an average $1,500. On the other hand, tying the proverbial knot will enable a $535 drop in car insurance costs, while buying a house and bundling car and home coverage will trigger a $235 decrease.
Otherwise, you can lower your auto insurance costs by:
- Raising your out-of-pocket deductibles for collision and comprehensive coverage, or dropping it altogether on older cars that might cost more to repair than replace.
- Making sure you get every one of an auto insurer’s discounts for which you qualify, which vary from carrier to carrier, and often from state to state.
- Canceling some provisions that may be redundant with coverage you have elsewhere (i.e. drop or waive towing coverage if your car is already covered by a roadside assistance program).
- Plugging a device into your vehicle’s diagnostic port that monitors driving habits and miles driven to garner an additional discount (providing you’re a careful driver and don’t rack up excessive miles, that is).
- Swapping vehicles for one that’s inherently cheaper to insure – costly luxury cars and sports cars are among the most expensive vehicles to insure, while family-minded minivans, crossovers/SUVs and sedans tend to be the most affordable to cover.
Finally, keep in mind that you don’t have to wait until your current policy is about to expire before comparing costs. Even if you’ve already paid for six months or a year of car insurance, you’ll be reimbursed for the unused coverage if you decide to switch companies. But never let your current coverage lapse while you’re shopping around for a better deal. Not only could you be subject to legal penalties for driving without insurance and being responsible for liability costs if you get in an accident, you’ll pay higher rates to get your policy reinstated and might even find it difficult to obtain new coverage from another company.
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