(MotivateDaily.com) – Car insurance sometimes seems like a necessary evil, doesn’t it? In the event of an accident, it can reduce the financial blow that comes with a damaged or totaled vehicle. And if that’s not enough encouragement to buy insurance, you’re also legally obligated to have it in most places. That’s why many people choose to let their coverage auto-renew at the end of each year.
Auto-renewal is simple and convenient — but is it the best option for your interests and your budget? Here’s what you need to know.
The Ins and Outs of Auto-Renewal
Most auto-insurance plans last for about a year, after which you have the option to continue with the current policy or switch to a new one. Many companies will notify you about a month in advance and then automatically renew the policy without you having to lift a finger. This may seem like an appealing option for multiple reasons.
The biggie is time. Why spend the extra energy renewing or changing your coverage plan when the one you have works just fine? With auto-renewal, you know your vehicle is covered 100% of the time, so you have one less thing to worry about.
People can also be forgetful. Letting your insurance expire, even by mistake, can be a dangerous game to play. If you have an accident or get caught driving without it, you could be subject to heavy costs and fines. Auto-renewal acts like a security blanket. Not having to rely on a flawed memory often feels like a big relief for policyholders.
Perhaps letting your car insurance auto-renew is starting to sound like a good deal right now. But in the long run, it might actually be costing you more money.
How Auto-Renewal Policies Can Drain Your Bank Account
Auto-renewal’s biggest downfall is that it can lead to complacency. If you’ve ever received notice about your policy at the end of the year, did you look at it closely? Did you think about how the rates might compare to other plans or providers?
Insurance rates are changing all the time — and despite popular belief, loyal customers don’t always get better prices. Many insurance companies use a process called price optimization to raise your rates regardless of your previous driving record.
Providers often expect you to be complacent. They count on you to accept those higher prices without bothering to look for a better deal. And if you’re willing to take the time, those deals are usually there.
You can combat rising coverage costs by shopping online for other policies each year. Even if you feel happy with the plan you have now, there’s nothing wrong with requesting a few quotes and comparing different prices to see what’s available.
You pay every month to protect yourself, your vehicle and your finances. It’s only fair that you should look for the policy that offers competitive coverage and prices. Instead of letting your car insurance auto-renew this year without a second thought, consider taking a look at a few other choices and finding out what happens. You deserve to have a plan that works best for you.
~Here’s to Your Success!
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