Did you know that car insurance accounts for over 40% of the market share in Canada’s insurance industry? In 2017, it generated over $15 billion in net premiums. These figures show that car insurance is a highly lucrative business for insurers. It is also beneficial to car owners. For example, it protects you from financial liability when an accident occurs. It helps you pay for your medical costs as well. Consequently, many people are loyal to their insurers.

Here are 5 things you should know about customer loyalty and car insurance.

• Being Loyalty Benefits You in Some Instances
  Customer retention plays a significant role in sustaining a business over a long period. They will offer you gifts and discounts so that you can become their loyal customer. The same case applies when it comes to insurance companies. They understand the value of customer loyalty. For example, the amount of premiums that they receive reduces as clients walk away from them. Therefore, some of them develop cost-effective packages to attract and retain their customers.  
• Being Loyal May Cost You As Well
  Unfortunately, many insurance companies take their loyal customers for granted. They understand that having car insurance in Canada is mandatory. They also know that changing from one insurer to another is a challenging process for many people. Therefore, they feel that they can optimize prices. Doing so increases their earnings, but it also leads to an increase in the level of premiums that their loyal customers pay. That means you can stay with an insurer for a bit of time and then your premiums go up without justification.
• Being Loyal Leads to Limited Choices
  The problem with brand loyalty is that it can blind you to some of the available choices in the insurance industry. For example, perhaps a new insurer is disrupting the market by offering better insurance products. Alternatively, existent firms may have redesigned their policies. How would you know about these markets and redesigned policies if you remain loyal to your insurer? Stop this confinement. Reach out to other insurance firms. Compare their insurance quotes by contacting Walter Zeiss, My Choice Car Insurance representative. Then choose an insurer based on the product and services that it offers today.
• Being Loyal Leads to Inconveniences
  Did you know that 32 insurers in Canada have become insolvent since 1979? One of the most shocking insurance insolvency cases was in 1994 when Canadian regulators seized control of Confederation Life Insurance. It was the fifth-largest insurer in Canada at the time. Many people were loyal to these insurers before they became insolvent. These loyal customers suffered the inconvenience of searching for new policies on short notice. Avoid these inconveniences by being practical instead of being loyal.
• Being Loyal Limits Product Diversity
  Being loyal to an insurer has devastating effects on the entire industry. More specifically, it limits the number of insurance products that are available in the market. That means car owners will have a limited number of choices. How does customer loyalty lead to a limited number of insurance products? Well, the incentive to produce new products and services is lacking because the insurers have a consistent and loyal base. Innovation occurs when insurers have to fight for this base instead of relying on it.
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