by Roger Lewis |
Last Updated: May 7, 2021 You may not know this, but many auto insurance providers offer renewal discounts for long-time customers. Retaining policyholders represents a huge savings over advertising to gain new ones. The company wants its customers to remain their customers, so being loyal can pay off.
Discounts for Renewing Early
Renewing a policy before it expires allows your provider to create a new policy without as much effort or paperwork. This proactive step is often rewarded with a discount.
Rather than waiting until the last minute to renew an auto insurance policy, save yourself the stress and harsh consequences of lapses in your coverage. You may even save some money in the process.
Waiting to decide to renew or to switch to a different provider can negatively impact you. If you are caught driving, or worse, causing an accident while there is a lapse in your coverage, it can result in:
- Suspension or revocation of your driver’s license and any related fees
- Filing an SR-22
- Large fines
- Possible jail time
At the very least, Some auto insurance providers offer as much as a 10% price reduction for renewing early, so why risk it?
Loyalty = Savings
The auto insurance industry is highly competitive. The rate at which customers switch providers increases every year, therefore insurance companies appreciate customers that stay with them.
Since customers can get quotes from multiple auto insurance companies from a single website, (Thanks, internet!), switching providers has never been easier. In an attempt to prevent their customers from seeking out other providers, many insurance companies will give discounts to policyholders who renew with them.
How Much Can I Save?
Some auto insurance companies offer a flat reduction of $50 or $100 as a loyalty reward for a policy renewal, but most companies offer a percentage discount off of your total premium cost. Your savings will vary depending on your provider and how long you’ve been a customer.
The discount will apply whether you decide to increase your coverage limits, additional coverage types like collision or comprehensive, or just go with your state’s minimum liability requirements.
Another way to save is by paying your annual premium in full. Paying it monthly incurs an interest fee. It may be a bit of a stretch to make that one-time large payment, but you’ll get to enjoy the savings all year.
More Insurance Means More Savings
Renewing your policy isn’t the only way to save money with your insurance provider. Many customers can save even more by buying additional policies from the same provider. Many insurance companies offer as much as a 20% discount for insuring multiple cars on the same policy. You can also save quite a bit of money by bundling your auto insurance policy with your renter’s or homeowner’s policy.
Most providers list the different discounts available on their website. You can also meet with your agent to examine your current coverages and determine if you are getting all of the discounts for which you may be eligible.