Switching carriers usually looks better in year 1 than it actually is. The new-customer discount fades; the loyalty discount you've built up on your current policy disappears. This calculator models both sides over 5 years and shows you the break-even point.
Loyalty discount accrual: we model approximately 1% per year of tenure up to an 18% cap. This is consistent with J.D. Power 2024 studies showing tenured customers receive larger persistency discounts but with diminishing returns past ~15 years. Some carriers (USAA, Amica, Erie) skew higher; some direct-writers (Geico, Progressive) skew flatter.
New-customer "honeymoon" decay: the new-customer discount is modeled as full in year 1, ~50% in year 2, ~15% in year 3, and gone by year 4. This pattern is consistent with Consumer Reports' 2023 investigation of carrier pricing structures and rate filings reviewed by state insurance departments. Some carriers (Allstate, Progressive) are aggressive on year 1 then quickly normalize; others (State Farm, Travelers) start tighter but hold longer.
Premium inflation is modeled at 6% annual for both carriers — close to the recent national average for homeowners insurance. Because it applies equally to both sides, it doesn't change the break-even date materially; we include it for realistic dollar projections.
Claims-free discount typically transfers with you because every U.S. property/casualty insurer pulls your CLUE database history during underwriting. The discount is recalculated, but the underlying record (zero claims in N years) is preserved.
What this doesn't capture: state-specific renewal rate caps (Florida and California have unique constraints), individual carrier rate-filing patterns, coverage differences between the two policies (always compare apples-to-apples — same deductible, same limits, same endorsements), and the bundling effect with auto/umbrella.
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