Should You Stick to the Same Car Insurance Provider for Years?
When it comes to car insurance policies, one of the toughest decisions to make is whether you should stick to the same insurance provider or make a switch. Since most car insurance policies are valid for just one year, you have to make this decision every year – either renew the policy or buy a new one.
Through this article, we will take you through the different pros and cons of sticking to an insurance provider for years and give a verdict on whether it is actually fruitful or not.
What are the pros of sticking to the same car insurance provider over a long time?
Most insurance companies reward their loyal customers by offering various benefits and deals. Even though the perks come with their own set of conditions but the term period of such offers extends in accordance with the time period for which the customer stays.
Here are some of the major benefits that you can expect:
- No claim bonus – The biggest benefit is definitely the No claim bonus (NCB). This is a way of rewarding your good and safe driving skills that enabled you to end the one-year term period without making any claims. As a result, you get a discount of 20% on next year’s premium. Interestingly, this discount increments with each claim-free year.
- Decrease in deductibles – Now this is a benefit that some insurance companies provide for extremely loyal customers. If you have been buying their insurance for multiple years now and that too without making any major claims, you will get a cut on the deductibles. In some cases, it can be completely waived off as well. However, note that this benefit comes into play only when you are making the claim and does not have an effect on the premium you pay.
- Accident forgiveness cover – This is an additional cover that you can buy, which ensures that there is no increase in the premium even if you are involved in an at-fault accident. One thing to keep in mind here is that this benefit can only stay active if you continue your deal with the insurance company because it is a non-transferable benefit.
- No added costs of buying a new contract – If you stick to the same insurance cover for multiple years, you will naturally save all the fresh policy fees and the other hidden charges.
What are the cons of sticking to the same car insurance provider over a long time?
Sticking to the same car insurance service provider for years is not all merry as it has its own share of downsides. Let us explain them in detail.
- You end up paying more because of sticking to the same plan – You end up sticking to the same provider mainly because of the comfort. You may not be interested in going through the whole insurance-buying process, thinking of it to be a tedious job, and end up renewing the policy that you already have. One thing that you do not realise is that because of this practice, you might very well be losing out on other great policies that offer much better benefits at the same price. Paying higher premiums for the same service is something that you would not want to do.
- Renewing the same policy might not suffice every year – More than the premiums, you should worry about the benefits that are covered in the policy. Before renewing, you should ensure that the current policy meets your insurance expectations. If you feel that the cover provided is not sufficient, you should start looking for a better policy.
- Missing out on discounts – The car insurance industry is at an all-time high and due to this cut-throat competition, most companies are coming up with attractive offers. So, if you find something that trumps your existing policy, you should definitely make the switch.
How worthy is it to stay loyal to an insurance service provider?
The worth of staying loyal to an insurance provider for years totally depends on the situation you are in. To start with, it depends on your financial situation and the expectations from the insurance.
If you are happy with the customer service and the claim settlement process of the current provider, you should not change even if you are paying slightly higher premiums.
This is where loyalty counts, as you end up getting more benefits over the years. However, if you are not satisfied presently, then you should look for other options. For this, the best way to go about would be to look for different quotes online and then do a comparison between them.
How to change the plan if you are interested?
The process of switching car insurance policies is quite simple because you just need to get the NCB transfer certificate if you have existing NCB benefits. This way, you will be able to continue enjoying such benefits even after switching to a new policy.
However, it is the process of selection that is more important. You need to be very careful about the different options available. Compare and scrutinize each option in the best possible manner. Add-ons, discounts, customer service, claim settlement ratio and premium are some of the key factors that you should compare.
Once you have found the right one, you just need to cancel the previous policy and buy the new one. You can do all this online through the official websites of the respective insurance company.
Loyalty surely has its own perks when it comes to sticking to an insurance company. However, it is not always true. Therefore, you should keep your eyes open for better options and make the switch when you want. Note that you do not have to wait for the term period to end to make the switch because you can do it even during the term.