Tips for Switching Auto Insurance Companies
Auto insurance is a fiercely competitive industry and that’s good news for consumers. You may think you have the best auto insurance rates, but until you check around you can’t be certain. Checking rates is easier than you think especially if you take time to review this useful advice.
Why make the switch?
The biggest reason people switch is because of the wide variation of prices on identical types of auto insurance coverage. Auto insurance companies set their own rates on coverage. Their rates are usually determined by evaluating the claims the company’s policyholders make. If it’s found that policyholders in your coverage group have made a high number of claims over the past year, chances are good your rates will increase just because you’re part of that coverage group. Coverage groups include policyholders falling within the same age range, or that own the same type of vehicle, or who have had a similar number of accidents. If other auto insurance companies do not experience similar claims patterns, their rates may be lower. Customer dissatisfaction is another big reason policyholders switch auto insurance companies.
When is a good time to make the switch?
About a month before your auto insurance policy renews is the best time to switch. That way you won’t have to go through the hassle of getting refunded for a premium that was paid in advance. Most states require auto insurance companies to send policy renewal letters to policyholders about a month before a policy expires. The letter lists the selected coverage and the premium, plus all the discounts to which you’re entitled. If you use this letter when requesting quotes from other auto insurance companies, you’ll be certain the quotes you’re getting are for identical coverage.
If you don’t want to wait, that’s fine. Most auto insurance companies will discontinue coverage upon receipt of written notification specifying the date you want coverage discontinued. Just ask whether you’ll be charged a short rate penalty for canceling during the policy coverage period. If a penalty will apply, compare the cost of the penalty against the savings you’ll realize by switching to see if it’s more cost-effective to switch now or to wait until you won’t be penalized.
One final word
Never cancel your current auto insurance coverage until you are certain your new policy is in effect. You never want to drive even one day without insurance. Your new auto insurance company can help determine the ideal start date.