You may consider switching car insurance for several reasons such as moving residence, better coverage options, or reducing premium costs. It is a process where you replace your existing car insurance policy with a new insurance policy that aligns with your revised needs and budget.
How Can You Switch Car Insurance?
Switching car insurance is an easy process. First, you select new car insurance. You, then notify your current insurer about canceling your existing policy. They may charge a cancellation fee while giving you a pro-rated refund of the balance amount. However, before you ensure that the insurance is canceled, you must make sure that your new insurance is activated.
When Must You Switch Car Insurance?
You can switch your insurance provider at any time depending on the reason for the switch. Many drivers wait for the time of renewal to switch their insurance company to avoid a lapse in coverage but if you are paying too high premiums, receiving less coverage, or experiencing a life-changing event, you can consider switching your car insurance in the middle of the term.
The most common factors that trigger a switch in car insurance are:
- Change of residence
If you shift to a new zip code, city, or state, you may consider changing your insurer. Your insurance provider may not offer their services at your new location or you may find more affordable car insurance rates that offer more coverage there.
- Buy a new car
Your new car may have safety and maintenance specifications that are different from your previous car which can impact your insurance coverage. If you find your premiums too high, you may look for more cost-effective options.
- Add a new driver
When your teenager gets their license, you need to add them to your policy. You can look for policies of other insurance companies that have lower premiums or offer student-based discounts which may not be offered by your current insurer.
- Experience a significant event
Such life-altering events such as marriage, divorce, buying a new home, going to college, or changing jobs are most likely to affect your car insurance coverage needs and premium costs. Thus, it is the right time for you to review your current car insurance. You may update your existing coverage or switch your insurance company altogether.
- Better customer service
Your dissatisfaction with the quality of service provided by your current insurer may lead to you looking for an insurance company that offers better service.
- Renewal date
When your car insurance provider notifies you about the upcoming renewal date, you can review your policy to ensure that the coverage aligns with your current requirements. If you get a new policy that meets your unique needs better, this is the best time to switch as you do not have to pay a cancellation fee or ask for a refund as you would have to during mid-policy. Also, you can ensure that your new policy starts the day your current policy expires thus preventing a lapse.
When You Should Not Switch Car Insurance?
There are instances when you must not switch car insurance. If a claim filed by you has not been settled and compensated by your existing insurance company, your new insurance company may not be able to offer the correct policy rate. This may adversely affect your premium rates.
Also, if you hide this information from your new insurer, you may have to pay a retroactive charge for the increased risk factor that your new insurer was unaware of. The company may even cancel your new insurance for misrepresentation of facts.
Steps You Must Take to Switch Car Insurance Companies
When you decide to switch your car insurance company, you must follow a few steps to ensure that the transfer is a smooth process.
- Assess the coverage you need
Besides standard liability coverage, the other coverages you add to the policy depend on your requirements. You must ensure that you are not inadequately covered as this exposes you to risks. Also, you must not buy extra coverage as you end up paying more than you need to.
- Compare quotes from several insurance companies
You must shop around for insurance quotes from multiple insurance companies. This allows you to compare rates and coverages and you can select the insurance company that offers the best deal.
- Look out for penalties
In some cases, you may have to pay a penalty but you may also get a refund of the balance amount. If the monthly savings with your new policy is higher than the cancellation fee, you may consider switching.
- Avoid coverage lapse
A gap in two consecutive policies means a considerable increase in premium rates later. You must activate your new policy before the old insurance expires to avoid a lapse.
- Ensure that your previous insurance is canceled
You must ask the insurer to confirm in writing about the termination of the insurance. This ensures that you will not be billed henceforth by them.
- Get your new insurance IDYou must get your new car insurance ID as soon as the old policy is canceled as proof of coverage.
For more information on the auto insurance policy, contact our team at Reardon Agency Insurance today. We are happy to answer your questions.
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