Here’s Why You Might Be Overpaying For Insurance, And How You Can Stop

{This article was originally published on January 13, 2021. It was updated on April 8, 2024.}

According to Lizabeth Cohen, a professor at Harvard, Americans love to shop: Shopping, Professor Cohen says, really took off following the Second World War, and we’ve continued buying stuff ever since. But for a country that loves to consume, how come so many of us forgo shopping when it comes to insurance? 

Listen, we get it, we really do: Insurance shopping isn’t exactly the most fun way to spend your free time, but even we were surprised to learn that most people don’t realize how much money they could save just by shopping around.

The Importance of Comparison Shopping

Think about the last big purchase you made. How much  research did you do in order to get the best deal? According to Pew Research, eight in ten Americans say it’s important to them to compare prices from different sellers before buying something for the first time. 

Now, think about the last time you were in the market for a new insurance policy. Did you shop around to get the best deal?  If you’re like most Americans, the answer is…nope! In fact, four in ten Americans say they have never comparison shopped for auto insurance! While it’s tempting to think of insurance as something you can just set and forget, that kind of attitude could be costing you serious money.

Different insurers charge different prices, often for policies that are relatively similar. So if you stay with just one provider, you might miss out on lower rates — and lower rates mean more money in your pocket. So the juice could really be worth the squeeze!

‍How Often You Should Shop

Generally, we recommend shopping for insurance at least once a year to maximize your potential for savings. You should also always shop around in the run up to or just following a major life event,  as these can affect rates and open up discounts. And when we say major life event, we mean major life event:  

• Marriage
• Buying a home or moving
• Having or adopting a child
• Changing jobs 
• Earning a degree
• Turning 26 (ish) — particularly for auto insurance, rates typically go down after the age of 25
• Improving your credit score

While an insurance provider will check your credit during the quote process, it’s only a soft check, meaning that it won’t  affect your credit score. So there’s virtually no downside to shopping around; in fact, it can only help you.

Canceling Your Existing Insurance Policy

Contrary to popular belief, you can cancel your insurance policies with most carriers at any time—even if you have a claim open. That said, some companies charge cancellation fees, so you will want to check with your individual carrier before canceling. If you prepaid for six or 12 months, you will typically get a pro-rata refund. 

If you’ve found a great deal elsewhere and are thinking about canceling your current policy, be sure to ask the following questions first: 

• Are there potential fees you might incur if you cancel your existing policy?
• Have you asked your existing provider to match the price?
• Have you asked the new provider for all applicable discounts?
• Can you bundle policies  with your new provider?
• Does your new policy provide sufficient coverage for your current situation? 

It’s also a good idea to read reviews and talk with any  friends and family who might already be with that insurance provider, just so you know what you’re getting into. Of course, nothing is a guarantee, but it’s helpful to get a feel for a company before switching.

Easily Shop for Policies With Marble 

Looking to change insurance or just want to take a peek at what’s out there? Either way, Marble can help you out! Plus, we’ll help you keep track of all your policies — new or otherwise. Get started with Marble today!