One of the worst things you can do for your finances is get too comfortable. Companies that provide financial services know the power of inertia. You’re not likely to pick up and change companies unless there’s something super appealing about a competitor, or if something makes you really upset with your current company.
That means your insurance company can raise rates on you even if you’ve been a loyal customer for years. The practice is controversial. Some insurance carriers are known to buy consumer data about you to determine how sensitive you are to price increases. They use this data to figure out how much they can increase your rates when it’s time to renew without you reacting. Then, at the same time they raise your premiums, they may say you’re getting a discount or a special rate for being a loyal customer. The catch is that sometimes that discount is made up just to make you feel valued. The practice of using data for price optimization is frowned upon by regulators, but it’s hard to prove insurance carriers do it.
Other carriers who don’t participate in price optimizing will nudge your premiums upward while giving discounts to new customers because they know you’re unlikely to move on. So, before you renew your policy without a second glance, compare your renewal rate to what you’re seeing for new customers at the same company—or what you might be able to get somewhere else. You might not feel like moving where you do your business, but for the right price, you’d probably be willing.