In the United States, it is necessary to have auto insurance to drive freely within the country. As a driver, you should know your coverage needs; sometimes, they change over time. There are many reasons to switch car insurance; one of the main reasons is that you need a policy with more coverage, or you can no longer finance the monthly premiums and are looking for a more economical alternative.
Hundreds of car insurance companies in the market specialize in different aspects. According to statistics, 77% of drivers constantly search for a new insurance company or compare quotes after a situation that triggers the company’s services. If you are looking for a new insurance company, we have prepared a guide with the steps to follow to change your policy without failing.
Reasons to change your auto insurance
There are many reasons to change an auto insurance company. Some of the most common reasons are:
- You moved to a new city and now pay a higher premium than before
- You bought a new car
- Your child got a license
- Someone who drives your vehicle from your home
- You drive fewer miles related to a life change, such as working from home, for example
- Credit score increased or decreased
The most important reason influencing these decisions is that something has changed in the driving profile. Insurance companies study the factors and even change zip codes to affect monthly premiums. In addition, each company has a way of calculating premiums for different aspects.
On other occasions, the policy change is not always related to the price but also the coverage capacity or to live a bad experience with your insurer at a crucial moment and you are looking for a more efficient service.
When to change insurance companies?
There is no rule for changing insurance companies; in theory, you could do it at any time; but that does not mean that any time is the ideal time. It is important to consider that some insurers offer loyalty discounts for long-time customers; if you resign before the established rule, you are not eligible for this benefit.
We also recommend that you review the conditions established in the contract to terminate the agreement. In some cases, you will have to pay the penalty, or you will not be able to receive a refund if you make the decision too late in the contract renewal date. Although you can leave the company whenever you wish, we suggest you change car insurance before renewal.
If, during this process, you ask yourself if it is bad to switch insurance companies, the answer is no. It is not bad to change insurance companies. It is not bad to change insurance companies, even if you have done it several times. You will also not be penalized by entities or other insurance companies.
How to switch auto insurance companies?
Switching auto insurance companies is easy, and drivers do it every chance. Here are a few steps to follow if you want to change companies without making mistakes:
Step one: Study possible penalties
If you are sure that changing your policy is the ideal alternative, you should also investigate the conditions set by your insurer to leave the contract. In some cases, companies establish a cancellation fee for leaving the agreement before the end of the coverage period. The good news is that, despite this, most companies allow you to terminate the relationship anytime, as long as notice is given.
The company will sometimes refund unused or prepaid premiums, although this is not always the case. Before canceling the policy, we recommend that you contact the customer service center and ask about the rules established for canceling an auto insurance policy.
Suppose the company charges you a penalty for canceling your policy in the middle of the term. In that case, we recommend postponing the cancellation at the end of the period or when it is time to renew the premium.
Step two: Compare quotes from other insurers
After checking your current insurer’s conditions for canceling the contract, you should ask for quotes and coverage from other insurers and compare which one fits your budget and meets your needs. The Insurance Information Institute recommends you have at least three different quote options to compare more clearly.
We advise you to consider not only the quotes but also the discounts and benefits that you can have in the new company with the same or better coverage than the one you have. To have complete information about your quote, you must indicate the following information:
- Home address of the car
- Year, make, and model of the vehicle
- Vehicle Identification Number (VIN)
- Driver’s license of all drivers stipulated in the policy
- Social Security Number of all drivers on the vehicle
With all the information you are interested in, you can choose which one best suits your needs.
Step Three: Join the new one and cancel your current policy
After signing a contract with your new insurer, contact the old one and inform them of your intentions to cancel the policy. This process can be done through a phone call with a customer service agent. We recommend you do this at least one day after the new policy has been activated.
If you have an auto loan or lease, you must notify the lender immediately of your new insurance policy. You must also include the lender on your new insurance.