For those of us who know what a loyalty discount is, is it really the way everyone should go in their quest for savings? We'll explore this but first let's make sure everyone understands what a loyalty discount entails...
Insurers give customers who have remained loyal long term discount and accident forgiveness.
Depending on the insurer, you'll be eligible for a discount of 5% once you've stayed with them for between three and five years.
Most insurers will also not raise the rates of a long standing policy holder if they make only just one claim.
Insurers offer these as incentives to keep you with them since it serves them better too.
But it will only be right for me to also point out that in spite of these incentives, you might actually gain more if you switch to another insurer.
Let us assume your auto insurance premium with your present insurance provider is $2,500 you'll get a discount of about 5% or $125 if you stay from three years and above.
However, due to inflation, insurance companies may have to re-adjust their rates to reflect those changes.
But while you are at it, an insurer somewhere could be prepared to give you a rate of $2,000 or less at the moment.
Then it would be anything but wisdom to stay put because you want to become eligible for a discount down the road knowing that the expected discount is less than savings you will get now if you switch.
Furthermore, in nearly all cases, most people will easily pay a lot less than they are presently on auto insurance if they shop right.
You can only know if this is true in your case after you obtain and compare quotes from many different auto insurance carriers and then see where your interest is better served.