Do you feel satisfied with your car insurance policy?
Even if you are, you could be paying more than you need to if you don't shop for auto coverage every year.
The Internet has made it simple to compare car insurance quotes, says Martin Levy, a financial adviser at Corporate Strategies Inc., an insurance and financial services company in Los Angeles.
"In an environment where it's so easy to compare products and pricing, there's no reason people shouldn't review their expenses," he says.
The company that offered you the best deal on a policy last year may not have the best deal today, he adds.
Karl Newman, president of the Seattle-based NW Insurance Council trade organization, says shopping periodically for the best price makes sense.
However, before you switch policies, it's important to make sure you're not giving up a loyalty discount that might offset any savings you find elsewhere, he adds.
Loyalty discounts typically range from 5 to 10 percent, says J. Robert Hunter, insurance director at the Consumer Federation of America. The time you must remain with a carrier to receive this discount varies by company.
Here are five reasons to give your car insurance policy an annual checkup by shopping around.
1. Gain peace of mind.
Newman says comparing auto policy prices and services will give you confidence you're getting the best deal available.
"You should not blindly stay with a company," he says.
You can shop by calling car insurance companies on the phone or by meeting with insurance agents in person, but the quickest way is to make comparisons is online.
When comparing prices, be sure to consider policy features as well, Newman says. For example, if your current policy includes collision and comprehensive coverage and a cheaper policy doesn't, the less expensive policy may not meet your insurance needs.
2. Save money when your teenage children reach driving age.
A July 2014 insuranceQuotes.com study found that adding a teen driver to your auto policy increased your premium by an average of 79 percent.
That's because insurance underwriters have found that teens are far more likely to file accident claims than older drivers.
The National Highway Traffic Safety Administration reported that in 2012 -- the most recent year for which figures are available -- 1,875 drivers between the ages of 15 and 20 were killed in U.S. car accidents.
Shopping for car insurance for teens is critical, since the amount carriers charge for young drivers varies widely. Insurers set their rates for teen drivers based on their individual insurance claims experiences.
3. Make sure your insurance company is financially sound.
Your annual comparison process should include checking whether your carrier is financially sound. It's great to save money on car insurance, but it's also important to make sure your carrier will have enough cash on hand to pay claims if you have an accident.
Online insurance company ratings from Standard & Poor's and A.M. Best Co. can tell you about the financial strength of these companies.
The nonprofit Insurance Information Institute (III) says you should make sure you understand the ranking systems of the financial ratings companies you use.
For example, the III notes that an A+ from A.M. Best is the second-highest ranking. However, an A+ from Standard & Poor's is that company's fifth-highest ranking.
4. Don't let insurers take you for granted.
If you feel like you're too busy to shop, staying with the same insurer seem like the best route to go. However, this doesn't make sense if you can get a better deal elsewhere. You don't want your insurer to assume it can keep your business without offering competitive rates.
Hunter says if your insurance company thinks you won't shop for a new policy, it has no incentive to keep prices low.
Hunter says some companies may raise their rates if they're convinced that longtime policyholders have no plans to change insurers.
The practice is called "price optimization" and insurers use this to figure out people's shopping habits and the likelihood of them changing companies if prices were raised.
This makes price comparisons more important than ever, he adds. "You really need to shop in order to be sure you get a good price."
5. Gain the power to negotiate.
Hunter says people who shop for car insurance gain the power to negotiate with their present carrier for a better price. If you find another insurance company that offers a cheaper policy with comparable coverage features, contact your carrier and say you're thinking of switching policies, he advises.
Hunter says he has successfully used this strategy with his own carrier. When given a choice between watching you take your business elsewhere and matching another carrier's price, many insurers will give you a better rate.