How I saved hundreds by switching and why you maybe can too
They say there’s a wisdom in crowds and, if so, it’s thanks to many thousands of you who have revealed a fascinating picture of switching in the insurance market. Over the past weeks more than 40,000 of you completed a survey telling us about your own experiences.
While many of you know the value in switching of insurance, with 43% of those who switched saving $100 or more, more than 50% fell into the easy trap of simply auto-renewing when their home or car policies came up.
Because of your loyalty you have probably been stung with higher premiums and helped to subsidise the lower premiums charged for comparable cover to someone who shopped around.
More than one in five of you had never changed insurance companies, with almost three quarters of those saying the things that stopped them was fear of a poor decision or difficulties in comparing different offers.
But the reality is the overwhelming majority of those who do switch enjoy a demonstrable benefit in terms of lower premiums, tariffs or interest rates. Even if they don’t, there are certain consumer protections to prevent them being locked in by unfair contracts meaning they can switch again out of trouble.
If I may mangle a line from the great Victorian poet Lord Tennyson, who wrote “‘Tis better to have loved and lost than never to have loved at all”, it is better to have switched and learned than never to have switched at all.
By changing a provider you should see not only the direct benefits in terms of taking advantage of competition but you’ll be more likely to keep switching when it suits you thereby staying ahead of the crowd. In short, you’ll become an active, rather than a passive consumer and who doesn’t want to be active?
It doesn’t have to be best-ever switch or lowest-ever price as that can take some time and effort to discover and then might change overnight. To my mind it just has to be a switch that puts you in a better position than you were before, and how much better simply depends on the time and effort involved.
It can be surprising.
My 16-year-old son wanted to learn to drive but my so-called comprehensive policy would only cover him if I upgraded for an under-25 driver. I heard of another insurance brand that covered learner drivers for free but figured while it might be more expensive it might add up to less than my present company was offering. In fact a simple phone call not only covered me for all his risks but also turned out to be almost $400 a year less than I had been paying. So I got better cover for substantially less money.
Over time I have switched a few providers. Electricity I’ve switched several times and it’s been straightforward. Gas: twice to follow power bundle discounts. Life insurance, I’ve changed twice to get out of a high commission rort but if often needs and deserves some time and proper advice. Home loan, I’ve only switched once to take advantage of a great offer. Home and contents insurance, I’ve switched three times due to constant annual policy hikes.
I could probably have switched more often than I have but I am happy with being ahead. There will always be a small group who, for whatever reason, will never switch and as a result end up paying higher prices. An increasingly confident, active crowd are discovering it pays to make a good switch.
