One in three Americans with homeowners or car insurance has never shopped for better coverage, according to a survey from Policygenius. Meanwhile, nearly 50% of the policyholders who have shopped for a new policy haven’t done so in the last 12 months.
Both groups are potentially leaving valuable savings on the table.
“It's not uncommon for insurance companies to re-rate on a yearly basis,” says Fabio Faschi, property and casualty team lead at Policygenius. This is due to tightening profit margins in the industry. “Insurers are regularly re-evaluating their product to make the most sense in changing markets.”
On occasion, re-rating can lead to lower premiums for policyholders. Homeowners insurance carriers, for example, sometimes offer loyalty discounts to long-term policyholders. But more often than not, consumers who stay with the same insurance carrier will see their rates rise over time. That’s why, when it comes to shopping for home and car insurance, “every year would be ideal,” Faschi says. “At the very least, policyholders should shop around every two years.”
Policygenius' survey is based on responses from 1,542 adults nationwide. It was conducted by Google Consumer Surveys from Dec. 18, 2018 to Dec. 20, 2018.
How to re-shop your home & auto insurance policies
Nearly half of Americans (42%) switched their car or homeowners policy after re-shopping, Policygenius’ survey found. The remaining respondents stayed with their current coverage due to an inability to find a better deal (53%) or lack of time (5%). If you’re worried about falling into that second group, there are ways to make the re-shopping process easier and more lucrative.
Shop for home and auto insurance at the same time, especially if you're currently bundling policies. Most carriers offer discounts to customers who purchase multiple policies, but you won’t necessarily get the best deal by tapping your car insurer for homeowners insurance (or vice versa). “In a way, you're being unfair to yourself because you're not seeing alternative carriers’ bundling discounts,” Faschi says.
Make sure you have enough coverage. Lower premiums are a good reason to shop around for a new policy, but you also want to keep your property and casualty coverage up to date. Basic homeowners insurance, for instance, doesn’t cover damage due to extreme weather, like a hurricane or wildfire. If your area has become more prone to these events in recent years, it’s important to upgrade before the storm. Insurers commonly issue moratoriums on buying new policies when property damage is imminent.
Ask questions about a policy’s fine print. Home and auto insurance quote comparisons are particularly tricky to navigate, given carriers don’t always use the same definitions for common industry terms. For instance, a replacement cost homeowners policy pays out claims based on how much it would cost to replace destroyed or damaged property today. “But carriers assess replacement differently,” Faschi says. You’ll want to understand the nuances and rules that may affect how much you get back for personal property claims. To get as close as you can to an apples-to-apples comparison, read each policy carefully and ask prospective insurers questions about any terminology you don’t recognize or understand.
Consider a broker. “They can propose several variations that you may not be able to navigate on your own,” Faschi says. But find out how a prospective broker earns their cut. Most make a commission off of each policy’s premium, but some net higher percentages if they sell or renew a high number of policies with a single insurer in a set timeframe. That payment structure can create incentive to steer customers to a subpar policy. If a broker earns income that way, you’ll want to know upfront.
Policygenius agents have no incentive to push pricier policies on people. We can help you shop for auto and homeowners insurance across multiple carriers.
Graphics by Hanna Horvath