How? Let us explain.
First, yes, there are loyalty discounts. If you stay with a company for 10+ years you will probably receive a discount of 10% or even more. So why are we saying this isn’t good for you? Because you still pay more in the end by being loyal. The first reason is the discount they don’t tell you about - the new business discount.

That’s right, did you know when you move to a new company they give you a “sales price”? This is usually between 5-10% off the “sticker price”. This offsets much of that loyalty discount.

The disappearing discount
But guess what happens a year later when your policy renews? You lose some of that discount. Typically, after 2-3 years, it disappears entirely. So maybe you got 10% off year one, that drops to 5% in year two, and 0% in year three.

Sure, if you stay around a few more years, you’ll start getting that loyalty discount to build up, but it’s mostly giving you back that discount you got on day 1! So let’s say you get a 10% discount if you move to a new company or a 10% discount if you stay with your current company. Does that mean you’re equally well off? – No!

Why not?
Because you gave up your right to shop for a better deal! Maybe your current company always has the cheapest deal but that’s unlikely. While they may have started out lower, prices change over time. Someone will inevitably come along with a lower price that you’ll miss out on if you’re focused on that loyalty discount.

You know which people usually find the biggest savings when they shop? Those who have been the most loyal. Why? Because they’re the ones who have been overpaying the most because they went so long without looking for a better deal.

Go shopping!
Don’t let that loyalty discount fool you into complacency. Shop around to see if you can do better. If you don’t find a better deal, you can always stay loyal.

Not sure how to evaluate different quotes when you shop? Take a look at our shopping guide that helps you learn how to compare different quotes to make sure you get the level of coverage you need. Or let us help you by comparing your quotes for you.