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Posted: 6:00 a.m. Wednesday, Jan. 29, 2014

When should you switch insurers?

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By Clark Howard

A huge percent of people never shop their auto and home insurance. That's not necessarily a good idea considering that modern American business punishes loyalty, rather than rewarding it.

The Wall Street Journal reports that roughly 1 in 3 people never shop their auto insurance. Almost half never their shop home insurance.

The thing is, insurers steadily beef up profits the longer you stay with them. They exploit creatures of habit. That's one of the ironies of modern capitalism, as I mentioned. The deals you see, particularly in the technology arena, are typically for new subscribers only! I've never understood that.

If you just shop your auto and home insurance, you may save hundreds each year, maybe more than $1,000. You can shop on the web, by phone, or with an independent agent.

It's your money.

But here's another wrinkle: Should you switch even if it's cheaper?

If you're with a poorly ranked insurer, there's no question. Fire them and shop the market to find a lower price. That's a win-win. You get higher quality at a lower price.

On the other hand, if you're with the two elites of the insurance industry -- Amica and USAA -- I say you should stay even if it's more costly.

One other thing, even if you decide not to shop the market, call your current insurer and see if there are any longevity discounts or other special discounts. You don't ask, you don't get.

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