A question we are asked by both new and existing customers is how long the average customer will stay with one insurance carrier. Here at Square State Insurance, we are an insurance broker not an “agent,” which means we work with many different insurance carriers, or companies. This allows us to shop coverages and present the best options to clients. Because of this, we also see customers switch insurance carriers from time to time. There are several reasons people may switch or stay with one insurance carrier. Let’s see how often on average customers switch and the pros and cons of making a change.
How Often Do Customers Stay With One Insurance Carrier?
So the burning question we’ll start with is how long does a customer stay with one insurance carrier? The average may surprise you. It is around five years. Even with all the “switch and save” ads and offers to “save more on insurance,” most customers are happy to stay put for several years. While each customer is different, we know there are several common reasons insurance customers like to stay put. Here are the top reasons people stay with one insurance carrier:
1) They’re Happy With The Service
Generally customers stay with a company because they are happy with service. If their rates stay stable and they don’t have to file a claim, they are all the more likely to stay put. This is more evident in customers who shop around before they decide on a carrier. If an insurance broker presents a customer a full range of insurance options before they decide on a carrier, they are even less likely to switch. People tend to think they’ve found the best deal if they get to shop around, and the reality is they probably have, at least for a year or two.
2) They Think They Can’t Save More
As we just mentioned, many insurance customers are under the impression they’ve found the best deal. This may be the case the year you add new coverage or even the year after, but eventually the policy will change. Maybe a customer files a claim and sees their rates increase. Or maybe there is a catastrophic claim in the local area and everyone’s insurance rates go up, regardless of whether they filed a claim. It is easy to get comfortable with one company and assume it is essentially the best deal around. This can make people stay with one insurance carrier no matter their individual circumstances.
3) They Forget
It is extremely common for customers to forget when their policy renews. If they don’t decide to switch before it renews, likely they’ll just stay and add another year onto their existing policy. This is easy to do if you don’t keep track. Often customers will even decide they want to shop elsewhere, plan to switch and then accidentally miss the renewal date. Polices can become more expensive as they renew, and you may not notice you’re paying more than you did last year, at least right away. We recommend scheduling an insurance review with your broker to ensure you check your options before it is too late. (Read more in New Year, New Insurance Review).
4) They Benefit From Loyalty Rewards / Accident Forgiveness
The final reason many customers stay with one insurance carrier has to do with bundling / loyalty discounts and accident forgiveness programs. For example, a customer may have used a driving habits monitoring device to save on their car insurance, and now they are worried they’ll lose the discount if they switch. Some insurance companies offer programs like accident forgiveness, but you may not be eligible for this benefit until you’ve been with the company for a longer period of time. This too can cause customers to stay with one insurance carrier for a long period of time. Finally, bundling will also keep customers with one company long term. The discount received by bundling your auto and home insurance (as well as other polices) can be a powerful one as far as making a customer stay. Don’t forget, each company has different bundling discounts, so again it pays to shop around even for bundles.
Reasons Not To Switch
Sometimes switching insurance carriers may be tempting, but it is not always the wisest choice at the time. Here are some reasons not to switch insurance carriers:
- You’re getting good bundling or loyalty discounts – As we mentioned, these can make a huge difference for some customers.
- Insurers value stability – Insurance companies don’t like to see customers switch companies year after year. Usually this is a sign they are a higher risk to insure. Establishing a stable record with an insurer is very important.
- A different company might actually offer worse rates – A switch always isn’t for the better. Do careful research and make sure it is a prudent move before changing companies.
What This Means For Your Insurance
If you’re happy with your current insurance, there is likely no reason to change. After all good customer service, loyalty and bundling rewards, and an established record of no recent claims is a big incentive to stay put. At the same time, there are certainly a lot of reasons why customers switch companies every five years or so. You should never assume you have the best coverage year to year. Working with an insurance broker like Square State Insurance is the best way to know whether or not you should switch. Contact us today to learn more!
