WASHINGTON – Most people assume loyalty matters when it comes to patronizing a business. But when it comes to insurance, sticking with the same company can cost you.
That’s the recent finding from the Texas Office of Public Insurance Counsel, a consumer interest group. They found the longer customers stick with their home or auto policies, the more savings they miss out on, reports the Wall Street Journal.
“Some people would rather have their teeth drilled than go shop for insurance,” Deeia Beck, executive director of the Texas agency, told the Journal.
The analysis found that insurance companies benefit with long-term customers because risk lowers and they make financial gains, however, long-term customers are likely paying too much.
Part of the reason, the analysis found, is that companies extend benefits to attract new customers. Meanwhile, long-term customers prefer to stay with what they have, and miss out on savings as a result.
Deloitte, an accounting and consulting firm, released a survey in the spring showing that 30 percent of auto owners and 45 percent of homeowners never switched insurance.