Is your auto insurance premium one of your larger monthly expenses? If you are like most drivers, you can answer this affirmatively without a second thought. A quality auto insurance policy from a trusted provider is a veritable necessity today. After all, you do not want to be exposed to expenses or legal issues unnecessarily because of inadequate coverage. At the same time, paying more than necessary for that coverage is impractical. The solution may be to switch car insurance providers.
When to Shop Around for New Car Insurance?
Auto insurance providers each have a unique rate calculation system, and their systems are usually developed around algorithms that take numerous factors into account. Some of the many factors that they often analyze include:
- Your age and gender
- Your zip code
- Your annual mileage
- The make and model insured
- Bundled coverage
- Qualification for discounts
- Your driving record
Most of these and other factors that are taken into account change periodically. To complicate matters, car insurance providers make adjustments to both their rates and their algorithms frequently. To avoid paying a higher premium than necessary, compare rates from leading providers annually. You also should consider switching a car insurance provider if you move to a new zip code, if you buy a new car or if you are informed by your current provider that your premium is increasing. In addition to shopping for insurance at these times, you will need to analyze other coverage options if your current provider cancels your coverage.
Whether you urgently need to purchase new coverage or you are curious about the other options available to you today, you can walk through a few easy steps. Let’s get started with easy steps for Switching Car Insurance Policies:
1. Analyze Your Auto Coverage Needs
Most drivers need to purchase liability coverage that sufficiently meets the state’s minimum legal requirements. Many people will also benefit from comprehensive coverage, collision coverage, personal injury insurance, rental car reimbursement and more. For these and other types of coverage, you generally have some control over the limits. You can also select your deductible, which is usually offered with a range between $250 and $1,000. It is helpful to request a quote for the same coverage and deductible from all providers. This enables you to easily identify the best deal available.
2. Contact Your Current Provider
You should contact your current auto insurance company next for two reasons. The first reason is to confirm that your current premium is based on the coverage that you want and need. If not, you should request an updated quote from your provider. The second reason is to ensure that you will not be charged a cancellation fee.
3. Compare Quotes
Requesting quotes from different auto insurance providers can be a time-consuming task. Each provider may ask you for details about yourself, your vehicle, your coverage needs and your driving record. While you could reach out to top providers individually over the course of several hours or longer, you can utilize the services of an independent consultant or broker as well.
4. Research the Top Providers
After you have a group of quotes from different car insurance companies for the same coverage types and limits, you can quickly identify the top few quotes based on price. Avoid impulsively setting up a new policy with the provider with the lowest rate. Instead, research the top few providers through A.M. Best. You can also read online reviews from other drivers. Pay attention to factors related to customer service, the claims process and raising rates.
5. Purchase New Coverage
Through the previous four steps, you have thoroughly explored the options and can confidently make your switch. When switching a car insurance provider, your new provider may ask you to pay the premium for the first month up-front. Your new coverage may not be binding until the insurer receives your payment.
Important Tips to Follow When Switching Car Insurance Policies
After you set up your new coverage and pay the first month’s premium, you are not yet done with your switch. Your new provider may email your new ID cards immediately after the coverage goes into effect. You must keep these cards with you while driving. Print them out right away so that you do not forget about this important step.
You also need to reach out to your old auto insurance company one more time. Notify your provider that you are canceling your policy. Obtain a confirmation number, or ensure that you receive an email confirming the cancellation. Before ending the call, inquire about the possibility of a refund. Because most insurance policies are paid in advance, you may receive a refund for any remaining days that have been prepaid this month.
If your car is under a lease or a loan, you must also notify your lender about the change. Generally, financing companies require their customers to maintain coverage on their vehicles at all times. To stay on top of this requirement, you should call your lender’s customer service department and provide the new policy details.
Switching a car insurance policy can reasonably be done within a few hours if you do the comparison shopping yourself. This is a well-spent time because it could potentially save you a tremendous amount of money over the course of the next year or longer. Furthermore, learning how to lower car insurance is also one of the top ways to save money and protect your budget.