I recently read an article by someone claiming to be a car insurance agent that said, all things being equal, insurers charge higher premiums to customers who don't shop around for quotes each year. The logic supposedly being that those customers are likely more willing to eat the increase. They weren't referring to customers who shop around and end up finding a lower premium with a different company. The claim was that your current insurer will quote you lower if they know you've shopped for quotes before renewing.
- Is this true?
- How would they know if you've shopped for quotes from other insurers?
Is the "Loyalty Tax" a real thing in car insurance?
byu/PitcherPlant1 inInsurance
Posted by PitcherPlant1
1 Comment
Not exactly. Yes, if you’re with an insurance carrier for a long period of time there’s a built-in increase term over term so over time you might wind up paying more than somebody else who’s fresh to the company. But no, they do not know you shopped around. Your renewal rate is your renewal rate, they don’t change that because they think you shopped or not. With all of that being said, it does pay to shop upon renewal and just make sure your current carrier is still in the mix.