When you are happy with your current car insurance provider and your rate, you probably have not considered switching to a different company. But if your premium goes up, you have to file a claim or if you’re in an accident, you might start looking at cheaper options.
There are many drivers stay with their auto insurance provider for years without thinking twice about switching, though you might be paying more for your car insurance policy than you need to. When the price of your insurance is increasing and you are not eligible for discounts then it might be time to move to another company.Each and every car insurance companies offer different rates, and sometimes the rates can vary significantly. Comparing rates between providers ensures you’re getting the best price for the amount of coverage you need, and some insurance companies may offer better discounts than others, which can help you save money.
- Consider your coverage options
It is important to understand the process, if you are considering moving to a different insurance provider, switching providers is not as simple as cancelling one policy and purchasing another. These are the nine steps you should follow in order to change car insurance providers.
A little insurance can leave you financially exposed, but too much coverage may mean you are paying more than you need to. If you think you are spending too much, consider switching car insurance.It is suggested for considering your age to determine the amount of coverage you need. If, a 22 years old driver who rents their apartment and has minimal assets might need less coverage than a 55 years old driver who owns a home and has a large savings account. You have to keep in mind that young drivers almost always pay more for car insurance than older drivers.
2. Decide if the time is right
Most auto policies last for six months or a year, depending on your state. One of the best times to check out other carriers and their premiums includes when you move. The distance you drive to work, your zip code and whether you park in a garage will all impact your insurance premiums. You should also look at insurance options following other big life events like getting married because married people often get lower rates.For example if you are moving because you bought a house, you often can bundle your home and auto insurance to save money. Almost every car insurers give discounts when you add another car or driver to your policy or any time you bundle policies.
By chance you have an accident or an open claim, it might not be a good time to switch or you may have to deal with two insurance companies while the details of the claim are settled. In addition, usually the insurance companies recalculate your rates around your renewal time, a new insurance company might calculate your rate higher than your current rate higher than it would be if you stay with your current provider for a few more months.
3. Check for potential penalties
When you decide to switch car insurance is the right option, find out if there are any penalties for changing before the end of the coverage period. Very fortunately, auto insurance companies generally give you the right to cancel your policy at any time as long as you give proper notice. Many insurance companies like Geico, State Farm, and USAA, will likely refund your entire unused premium, some may hit you with a fee if you choose to cancel in the middle of your policy term. For example, warns its customers that they may charge $50 if they cancel before a policy expires.
4. Compare car insurance quotes from multiple carriers
While comparing rates from multiple different companies gives you a better understanding of average costs and standard coverage options., and getting car insurance quotes is an easy process, but you’ll need some basic information to get an accurate quote. A lot of factors can influence your car insurance rates, which leads to variations between providers. The other factors can also impact your pricing, including discounts for which you’re eligible. Common discounts include:
- Having a good driving record
- Driving a low number of miles per year
- Getting good grades if you’re a student.
- Taking a driver’s education course
5. Contact your current carrier
If your insurance company values you as a customer, they may be willing to fight hard to keep your business. Always talk to your agent and let them know that you’re in the market for a better deal, it could convince your existing insurer to match or beat rival car insurance quotes for keeping you from switching car insurance.You can also find out whether you are missing out on any discounts with your current insurer.
6. Research the new company
Most state insurance offices monitor carriers’ customer complaint ratios, which is the number of complaints for every $1 million in premiums collected. A high ratio warns you that the company’s current customers aren’t very happy.Before committing to a new insurance provider, it’s important to research the company using reputable sources. You can read online reviews and look at their ratings from the Better Business Bureau (BBB). You can also use J.D. Power’s insurance studies and Bankrate’s own carrier reviews. Another research tactic is to call the carrier to get a feel for what their customer service is like, which can give you the most accurate glimpse into their helpfulness and reliability.
7. Avoid a lapse in coverage
In insurance coverage, a lapse could lead to serious legal and financial challenges, especially if you become involved in an accident while uninsured. Primarily, your old insurer could report your terminated policy to the state. If there isn’t a clear overlap or smooth transition from one policy to another, you could be penalized or find your driver’s license suspended.It could also cause insurance companies to charge you higher premiums down the road because they may perceive you as a “high-risk” driver. It is important that your new insurer should be able to time the new policy so that it begins exactly as your old coverage ends.
8. Make sure your old policy is cancelled
- Contact your current insurance agent and notify them that you are terminating your policy. This will prevent them from billing you for future coverage.
- While signing up for auto-payment, you may need to log into an online account and cancel the auto-withdrawals.
- Let your agent know that you want the termination confirmed in writing. It gives you proof that you cancelled the policy if you continue to get billed or see a negative remark on your credit report. The charges or credit report entry can be disputed by you.
Every car insurance companies offer different rates, and sometimes the rates can vary significantly. Comparing rates between providers ensures you’re getting the best price for the amount of coverage you need, and some insurance companies may offer better discounts than others, which can help you save money. When the price of your insurance is increasing and you are not eligible for discounts then it might be time to move to another company.