You’ve been with the same insurer for years. Suuurrre, call it “loyalty”, if that’s what makes you feel better.
People respect “loyalty”, don’t they? We crave it. We want family and friends to think we’ll stick by them, through thick and thin.
Loyalty gives us a warm fuzzy feeling, kind of like how Lisa Simpson glows after a vegetarian meal. (Or maybe that’s just the radiation from the power plant.) But is loyalty admirable when it comes to your finances? If it means you could be paying twice as much for the same level of service, or quality of product?
If you just said “yes” … are you serious?
Loyalty is actually close to the stupidest thing you can do financially. Think Harry Dunne (Jeff Bridges) licking that pole on Dumb & Dumber.
Why? Because financial institutions make their fattest, laziest, profits from their most loyal customers. Because they don’t have to do any work to keep you! They’ve got you hooked. Why be nice to you? Why keep your premiums/rates low? They can ignore you, or raise your pricing. You won’t leave, because you’re too loyal.
Financial loyalty is the equivalent of sitting on the back porch with a cold beer or glass of vino, striking up a match and burning (or, with Australia’s currency, melting) $50 and $100 notes because someone you like has asked you to.
Blindly sticking with the same financial provider without comparing other products and services – including insurers and banks – could lead you to being taken for granted.
That’s where little old you is fighting with companies worth literally tens of billions of dollars. They are paying people 10 times your salary to find out ways to pacify you, the sucker, and keep you paying the same inflated price you have always paid. When it comes to your personal finances – insurance, banking, loans, etc – throw loyalty out the hotel window like you’re an angry rock star with a broken TV.
You work too hard to be ripped off by wealthy corporations. Well, I know I do, so I’m assuming you’re no dill either. Challenge your current providers regularly, in every aspect of your financial life.
And it’s simple. For example, grab your last health insurance statement. Punch your details into www.comparethemarket.com.au. Find out if your current provider is “in the ballpark” in regards to cost. If they are, great.
Then compare on features. If your insurer measures up against on features, that’s great also. You’ve taken the bull by its horns and spent only a few minutes of your life comparing other available options.
If you’ve just discovered you’re being really badly ripped off … would you like a few minutes alone to deal with your shock, anger or plain embarrassment?
I test most of my financial providers most years. And, almost without fail, every year I find that some company is taking the mickey out of me, because they believe I’ll stick around no matter how much they raise the cost.
I pull the trigger and drop them.
Loyalty is a quality to be respected. But only where it’s mutual. Don’t let big corporations take you for granted.