As a driver, it’s normal to want to compare auto insurance quotes to make sure you’re getting the best deal on your policy. according to data from j.d. power, about 77% of drivers are actively looking for a new auto insurance company or have recently compared quotes after an event triggered the need to purchase a new policy.
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Whether you’re moving, buying a new car, getting rid of an old car, adding or removing a driver, or filing a claim, you may be wondering if it’s time to switch insurance companies. Looking for a new auto insurance policy or company can be a crucial part of ensuring your coverage is sufficient and you’re not paying more than you should for your policy. Fortunately, switching carriers is not difficult. Bankrate’s insurance editorial team can help you learn how to change your car insurance in eight simple steps.
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when to change car insurance company
Although you can change your auto insurance company at any time, certain events may mean it’s time to start looking for a new company, or at least get quotes from other insurers to make sure you’re getting the best deal and coverage. to satisfy your needs. you may want to consider purchasing new coverage if:
- Moving to a new ZIP code, city, or state: Your city, state, and even your ZIP code can affect your auto insurance premium. If you’re moving, it might be a good time to consider a new auto insurance company to at least see if rates are more competitive in that area.
- Adding a Driver or Car: If your teen is about to get a license or is adding a new car to your household, consider getting quotes from other insurance companies. each company has different rates and many offer student discounts, so you may be able to find a company that offers a lower premium for your new driver or vehicle.
- Experiencing a life change: Life changes, such as getting married, divorced, buying a home, or getting a new job, can affect your auto insurance needs and premium. Upgrading your current policy or looking for a new one may be a good idea in these circumstances.
- Approaching your renewal date: You can change your auto insurance at any time, but your renewal date offers a particularly convenient time to switch. If you cancel your old policy on your renewal date and start your new policy on the same date, you’re less likely to deal with small bills, a cancellation fee, or refunds from your old policy. the important thing is to make sure there are no breaks in coverage because this can leave you financially vulnerable and can increase the cost of future premiums.
- See an increase in premiums: This will usually happen at a renewal or if you make a change to your policy. Seeing an increase in your car insurance bill may mean it’s a good time to see if other companies can offer you a cheaper car insurance rate.
- Review your options: If you’re happy with your company and your premium, there’s really no need to buy new auto insurance. however, if you’re curious, there’s nothing wrong with getting quotes. you may find that another company offers much lower rates or offers policy features that your current carrier doesn’t offer. simply getting quotes has no adverse effect and does not obligate you to sign a purchase agreement.
- address where the car will be stored
- year, make and model of vehicle
- vehicle identification number (vin)
- driver’s license numbers for all the drivers you need listed on the policy (car insurers will use this information to review your motor vehicle registration and any other personal factors that may affect your premium, such as your insurance score based on credit in some states)
- social security numbers of the policy owners (not all companies require this, but it is common practice to make sure the credit-based insurance score matches the correct insured name)
- bankrate insurance company reviews: bankrate’s editorial team looks at average premiums, customer service scores, third-party financial strength ratings, coverage options available and discounts to determine which auto insurance companies to present. In addition to our overall best company picks, we also break down the best auto insurance companies in each state to help you get a better idea of what’s available in your area and how much it might cost.
- The National Association of Insurance Commissioners (NAIC): This organization assigns a score to each company based on the average number of consumer complaints it receives. a score above 1.00 indicates a number of complaints above the industry average, while a score below 1.00 indicates a number of complaints below the industry average.
- j.d. Power: This company conducts studies from multiple angles, including overall customer satisfaction and claims satisfaction, and assigns a score to each auto insurance company. some of their ratings are also region specific.
- am best: If you want to know more about the financial strength of a company, am best can be a good resource. am best rates companies with letter grades based on numerous financial measures, which can indicate a company’s historical ability to pay claims. The higher a company’s am best rating, the more financially stable that company has historically been.
- Contact your current insurance company and notify them that you are canceling your policy. this will prevent you from being billed for future coverage.
- If you signed up for automatic payments, you may need to log into an online account and opt out of automatic withdrawals. If you use your bank’s bill pay service to pay your premiums, be sure to stop payments with your bank.
- ask your operator to confirm the termination in writing.
While switching providers can have its advantages, there are also times when switching auto insurance providers may not be a good idea. If you just filed a claim, for example, you probably won’t be able to switch companies. If the claim has not been settled and paid, your new auto insurance company may not have the opportunity to properly rate your policy. this could cause a large increase in your new policy premium at renewal, a retroactive charge to account for the increased risk of the new company not knowing, or even a cancellation for misrepresentation if you didn’t tell your new policy. company about the pending claim.
8 easy steps to change car insurance
If you’re thinking of switching to a new auto insurance company, you may be wondering how to make the switch. Here’s how to navigate an insurance company change:
1. consider your coverage options
Too little auto insurance can leave you financially exposed, but too much coverage can mean you’re overpaying. For example, if you own an old car that isn’t worth much, it may not be profitable to pay the higher rates that come with a comprehensive coverage policy, as long as you don’t have a loan or lease. If you think you’re overspending, you may want to consider switching auto insurance.
Ultimately, the more coverage you add to your auto insurance policy, the more it will cost. If you’re wondering how to switch car insurance, understanding the different types of car insurance coverage—and which ones you need—is an important first step.
Learn More: Common Types of Auto Insurance Coverage
2. check possible sanctions
If you decide that changing your car insurance is the right option, you may want to find out if there are any penalties, such as a cancellation fee, for changing car insurance companies before the end of the coverage period. Fortunately, auto insurance companies generally give you the right to cancel your policy at any time, as long as you provide proper notice.
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While most auto insurers will likely reimburse you for unused premium, some may charge a fee if you decide to cancel in the middle of your policy term. Before you cancel your policy, you can talk to your company’s customer service department or ask your agent if the company has any specific cancellation provisions.
If you find that you will be charged a penalty for canceling in the middle of your term, you may want to postpone changing your policy until your policy is ready to renew. But if you can find a new policy with a premium that offsets the cancellation fees charged by your old provider, it may still make financial sense to switch companies.
3. compare auto insurance quotes from multiple companies
If you’ve decided it’s a good time to switch companies, the first thing you should consider is getting quotes from different auto insurers. This will allow you to compare auto policy premiums, coverage options, and discounts you may be eligible for. just make sure you’re getting quotes for the same coverage, so you’re comparing premiums for the same levels of coverage types. Whether you’re getting quotes online, over the phone, or at an agency, you’ll probably need to be prepared with some basic information:
While searching for businesses, you can also review available discounts. Asking companies to include all the discounts you qualify for in one quote may help you find cheaper coverage.
more information: average cost of car insurance
4. contact your current carrier
As you receive quotes from other carriers, it may be beneficial to contact your current supplier. While it’s an auto insurance myth that insurance rates are negotiable (meaning your company won’t be able to lower your bill just to keep your business), you may be able to identify discounts and other savings opportunities that are currently being offered. is losing. Your agent may have suggestions on how to lower your costs, such as maintaining a clean driving record or even purchasing a less expensive vehicle.
This step is especially important if your insurance is underwritten through an independent agency. Independent insurance agents can represent numerous insurance providers, unlike captive agents who only sell insurance products from a single company. An independent insurance broker can compare your policy with several companies to find you a lower rate and keep your policy with the same agency.
more information: the best car insurance discounts
5. research the new company
You may want to thoroughly research an insurer before purchasing a policy. Price isn’t the only factor to consider when shopping for auto insurance. reviewing other metrics can help you make sure you choose a carrier that fits all of your needs, not just your budget. Some helpful resources include:
While price is an important consideration, it’s not the only factor you should consider when choosing an auto insurance company. working with a licensed insurance professional can help you choose a provider that fits your needs.
more information: how to choose the best car insurance company
6. avoid a lapse in coverage
If you change your auto insurance after your current policy expires, you could experience a gap in coverage. A lapse in insurance coverage could create serious legal and financial challenges, especially if you are involved in an accident while uninsured. If you cause an accident and you do not have insurance coverage, you will be responsible for the damages, including any applicable medical bills, out of pocket. Even if you are not at fault, most states require insurance providers to file proof of insurance with the Department of Motor Vehicles after an accident if the police are called. If you don’t have car insurance, your driver’s license could be suspended.
driving without insurance could cause insurance companies to charge you higher premiums in the future because you may be perceived as a high-risk driver as a result. Your new insurer should be able to schedule the activation of your new policy to start exactly when your old coverage ends.
Learn more: Does a gap in coverage affect your auto insurance rates?
7. make sure you cancel your old policy
If you’re switching auto insurance to a new insurer, don’t assume your current policy will automatically cancel if you stop paying premiums. Most insurance experts recommend that you contact your current carrier to cancel your policy when you switch to a new auto insurance company.
Follow these few steps to terminate your old policy:
Each insurance company has its own process for canceling policies. you may need to sign a form authorizing cancellation or you may need to call and speak directly to a company customer service representative. your insurance agent can help you through the process.
more information: when and how to cancel your auto insurance policy
8. print your new auto insurance ID cards
Once you’ve officially canceled your old policy and started a new one, you’ll likely want to exchange your old insurance ID card for an updated one to keep in your vehicle or wallet. If you’re pulled over by the police or involved in an accident, you’ll need proof of coverage with your new auto insurance provider.