Switching Insurance Companies: Is it a Risky Game of Musical Chairs?

Switching insurance companies too often might seem like a good idea to save money, but it can actually have a negative impact on your insurance rates in the long run.

Commitment is Key

When you switch insurance companies too many times, it can signal to insurers that you’re a flighty customer who can’t commit. It’s like going on a first date and talking about how you’ve been on a dozen Tinder dates in the last month. Not a good look, right?

Insurance companies keep a close eye on your insurance history through a system called CLUE, which stands for Comprehensive Loss Underwriting Exchange. It’s like the insurance version of Santa’s naughty or nice list. If you’re switching companies like it’s your job, you might find yourself on the “naughty” list and paying higher premiums as a result.

Plus, frequent switches can also hurt your insurance score. It’s like playing musical chairs, but instead of a fun game, you’re left with higher rates. Your insurance score takes into account factors like your payment history, credit score, and insurance history. Frequent switches can make you look like a risky bet, and insurers will charge you accordingly.

And remember the benefits and discounts you lose when you switch. It’s like trading your first-class plane ticket for an economy ticket on a new airline. You might end up with less legroom, no complimentary meals, and longer layovers without any perks or recognition for your status. Similarly, you could lose out on loyalty discounts and other benefits by switching companies too often.

Play the Long Game

So how many switches are too many? There’s no magic number, but most experts recommend sticking with one insurer for at least three to five years. That way, you can build a solid insurance history and take advantage of any discounts or benefits of being a loyal customer.

In the end, switching insurance companies too often might save a few bucks in the short term, but you’ll end up paying for it in the long run. Gibbel Insurance can help you decide if making a change is best for you and your insurance score.