Auto Insurance Comparison Shopping - Save on Your Premiums

When it comes to being a smart auto insurance consumer, you should heed the advice that Smokey Robinson’s mamma gave to him - shop around!

Consumer advocates recommend that you evaluate your auto insurance coverage at least twice a year, and doing so even more often could result in big savings. The reason is that the internet has revolutionized the way insurers do business and created an increasingly competitive environment. Instead of padding a corporation’s bottom line, competition essentially forces insurance companies to pass on cost savings to their customers in the form of reduced premiums.

But if your insurance agent views you as a “captive customer,” he is unlikely to call you and say, “I can save you $25 a month without changing your coverage - do you want me to?” For the most part, the only way to get a better deal is to comparison shop. Insurance agents and companies will offer you a great deal to get you as a customer, and if they know you’re a vigilant comparison shopper, they’ll be much more likely to make sure you’re always paying the lowest premiums possible for the coverage you need.

One Real-Life Example of Savings Through Comparison Shopping

Wesley J. Smith is a lawyer and tireless consumer advocate. In 1992, he co-authored a book with Ralph Nader entitled The Frugal Shopper. In it, Smith relays a first-hand account of how comparison shopping for car insurance can save you money.

In the late eighties, Smith was looking to insure two vehicles. He requested three quotes from agents at three different companies, but he didn’t like the results. Despite the fact that neither he nor his wife had ever received any tickets or been involved in any accidents, Smith’s insurance was quoted rates ranging from $3,000 to $4,200 per year. Adjusted for inflation, these rates are equivalent to between $5,135 and $7,190 in 2006 dollars.

Smith knew he could get a better deal if he kept comparison shopping. So he went back to the company that quoted him the lowest rates and asked to speak with another agent. This second agent took the time to really work with Smith to make sure he was getting all of the discounts he was entitled to. By making this extra effort, the second agent was able to save Smith $900 per year - $1,540 in today’s money.

Comparison Shopping - It’s Easier Than Ever

Thanks to the internet, comparison shopping for auto insurance has never been easier. When Wesley Smith and Ralph Nader wrote their book in 1992, comparison shoppers needed to meet with agents face-to-face, and thus, were limited to buying insurance from an agent in the immediate area. Now the internet allows for national competition, and agents will fight for your business. Most consumers can easily save a few hundred dollars a year on their auto insurance, while maintaining or improving their coverage. There’s no reason not to get started today!