Does Loyalty Pay or Is It Better to Shop Around?

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Shop around. It’s our mantra around here and we truly believe in it. When you shop around and compare car insurance rates it’s the one and only way to know for certain that you’re getting the best deal possible for your coverage. Every now and again, however, someone will ask: What about my loyalty discount? Won’t that save me more money in the long run?

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Everyone fears losing their loyalty discount. After all, it’s taken you years to earn it. And while it's true, your loyalty discount can result in a great car insurance rate, you shouldn't let the idea of being loyal to an insurance company cost you money over the long term. Here’s why.

Car insurance loyalty discounts: fact or fiction?

Actually, it’s both. Not all car insurance companies offer a loyalty discount, and for those that do, the discount will typically save you about 5%. For some companies it’s a flat discount that is applied each year, while for others it’s a tiered discount. This means that as each year goes by you save a little bit more. Loyalty discounts can definitely mean lower car insurance rates, but it doesn’t mean that it’s the best rate out there — it’s just the best rate your current car insurance provider can offer you.

Compare quotes for the best car insurance rate: fact or fiction?

Fact! Only by shopping around and comparing quotes will you know when you’ve got a great car insurance rate. Indeed, your best rate might be from your current auto insurance provider, but it may not — the only way to know is to put your premiums to the test. You’ve got nothing to lose, only money to save when you shop around for the best deal. We do it for virtually everything else, why not auto insurance too?

What’s more, there’s no better time than now to lock in a great rate. While prices were on the rise, especially in Ontario, for more than two full years, the average approved auto insurance rate change has hovered around 0% since the COVID-19 pandemic hit in early 2020. During that time, many companies cancelled or delayed raising their rates, while some insurance providers offered their clients rebates and reductions.

Quarter and Year Average Approved Car Insurance Rate Increase
Q3 2021 -0.3%
Q2 2021 0%
Q1 2021 0%
Q1 – Q4 2020 0%
Q4 2019 1.56%
Q3 2019 2.60%
Q2 2019 1.99%
Q1 2019 2.70%
Q4 2018 3.35%
Q3 2018 2.06%
Q2 2018 1.11%
Q1 2018 2.23%
Q4 2017 1.03%

Does shopping around affect loyalty discounts?

No. While you will lose your loyalty discount if you switch car insurance companies, there is no risk of losing your discount if all you’re doing is seeing who is offering what rates. There is no obligation, so you can compare rates whenever you like. This will give you a better idea of how your current rate stacks up in comparison with what is out there. If you find a lower car insurance rate than what you’re currently paying, great! If not, then you know you’re sitting pretty with your current provider... for now.