Reasons to Consider Switching Car Insurance

Are you satisfied with your car insurance?

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Aside from gas, maintenance, and the cost of the car itself, car insurance is one of the most significant costs associated with driving a car. But shopping for car insurance isn’t many car owners’ idea of fun.

Thankfully, if you are not happy with your current car insurance, it’s pretty easy to switch to a different provider at any time. However, knowing when the time is right to switch and the best company to switch to can be a bit more challenging. Below are the top reasons you should consider changing policies, as well as some practical steps for doing so. 

Cost

It typically pays to comparison-shop, and it’s no different with car insurance. You often can find virtually the same coverage for many different prices when shopping among a variety of insurers. A lot of factors, both about you as a driver and the company from which you’re purchasing insurance, go into determining the final price you pay for your policy. Your age, driving record, your car’s safety equipment, credit history, and even where you live are part of the pricing of your policy, so be aware of any liabilities you may have that could raise your policy quote.

You should look around before you buy, and continue to shop every couple of years to ensure you are getting the best deal.

If you have recently improved your driving record, it may be a good time to comparison-shop, too. You’ll likely be offered a much better rate than before. 

Personal Choice

Often, less expensive insurance coverage requires that you to take your vehicle to a repair shop authorized by the insurer when you need to get it repaired. Progressive Insurance offers network repair shops, as does Geico, though you can often still go to a repair shop of your choice. While it may help keep costs down, you might decide you need and/or want more flexibility. Be sure to read the fine print of any insurance plan before signing up. 

Benefits

Make sure you know what you are getting beyond the bare bones. Accident forgiveness? Rental car coverage? Savings if you bundle insurance, such as your car and home policies? These things will factor into the sticker price, but they will also contribute to your overall experience. The best way to make sure you are happy with your insurance policy is to fully understand how it works, what’s covered, and how much it’s going to cost.

Closely compare what benefits you see in a quote because not all companies offer the same driver benefits.

Your Circumstances Have Changed

If something changes in your driving life, it’s probably time to comparison-shop for a new insurance policy. If you purchased a new car and are financing it, you might need full coverage until the car loan is entirely paid off. If you move to a new city or state, you may need to change insurers altogether because most insurance agents are only licensed to sell insurance in the state in which they reside. And if you were laid off or furloughed, you may be in need of low-income car insurance so that your premium fits your new budget.

If you are looking to add a new driver to your policy, it’s wise to review your options. Get quotes from multiple companies to avoid a significant rate increase and ensure you’re getting all of the coverage you need. 

The Insurance Company 

If you have had problems dealing with a particular insurance agent, the company itself, or its claims adjusters, you should look into switching to a new insurance company. Likewise, if there’s been a big ethical scandal at the company, it might be time to put your money elsewhere. Every insurance company receives both positive and negative reviews. Talking to friends and family about their personal experiences with their own car insurer may be helpful in finding a friendly and knowledgeable agency near you.

Before Switching Policies

If you want to switch car insurance policies, it’s time to do some comparison-shopping online or by phone, so that you can find the best rate available to you. Some things to consider are how much coverage you actually need and want to pay for, whether you will incur any penalties for leaving your current insurer before your contract is up, and making sure that the new company you are considering has the perks and personnel you need and want.

Take time to speak with an insurance agent from the prospective new company. Ask about how they compare with your old insurer. If they want your business, they should be more than happy to tell you all the ways in which they are better. 

How to Switch Car Insurance Policies

First, wait until the renewal period arrives. You could get hit with penalties for early termination of your current policy. Your current insurance company will likely try to woo you to stay if they know you are thinking of not renewing. 

Next, sign up for your new policy as soon as you can so that you don’t have any gaps in coverage. If you’re used to paying your monthly or annual premium online, be sure to set up online bill pay, too, so you don’t miss any payments.  

Switching car insurance is a simple process but it does take some know-how and preparation. It pays to do your research. Don’t switch insurers like you switch outfits—take your time to make sure that it’s financially worth it to change providers and that the new company and policy fit your needs. Take the time to do things right. Talk to people at the new insurance company and sleep on it before making the decision. 

Article Sources

  1. CFPB.gov. "My Insurance Company Increased My Car Insurance Rates Because of My Credit Report. Is That Legal?" Accessed Jan. 7, 2020.

  2. Insurance Information Institute. "What Determines the Price of an Auto Insurance Policy?" Accessed Jan. 7, 2020.

  3. National Association of Insurance Commissioners (NAIC). "State Insurance Regulation." Accessed Jan. 7, 2020.

  4. International Risk Management Institute. "Short-Rate Cancellation." Accessed Jan. 7, 2020.