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How To Switch Car Insurance Companies
It may be easier than you think! There are many reasons why you may choose to move your autoinsurance coverage to another company. You might have changedjobs and are eligible for a group discount through anotherinsurer, or maybe you're unhappy with the service that yourpresent company provides. Perhaps you've simply found anothercompany willing to offer you the same level of coverage forconsiderably less money. Nowadays, many insurance companiesprovide 24-hour rate information through their toll-free numbersor websites, so investigating your options has never beeneasier. Another valuable source of information is your state'sDepartment of Insurance.Why switch to a new insurance carrier? Regularly reviewyour auto coverage to make sure that you're receiving the bestinsurance value for your money. You'll discover that it pays toshop around. In some states, premiums for identical policiesvary widely among different companies. The reasons for thisprice variation can be very complicated, but they boil down to acompany's claims experience with policyholders in your coveragegroup (e.g. people of similar age, number of accidents, type ofvehicle). For example, if a large number of people in yourcoverage group files claims during a given year, your rates willlikely rise. When this happens, better discounts and loweroverall premiums may be available at other companies, althoughsome states strictly regulate the price of coverage. When youdecide to switch your auto insurance to another company, you'llfind that it's fairly easy to do so.How to cancel your old policy Generally, all you need todo to cancel your auto policy is to inform your insurancecompany in writing, specifying the date you want the policycanceled. In some states, your new agent must notify yourprevious agent of the policy change. Some companies ask that yousend back the actual printed policy. Your insurance company willsend you a cancellation request form that you should sign andreturn. Examine the form carefully to make sure that allinformation regarding your policy is correct. If you do notreceive such a form within two weeks of sending your letter,call your agent or the company immediately to check on thestatus of your cancellation. Don't just walk away from your oldpolicy without formally canceling it. Otherwise, the insurancecompany might assume you wished to continue your coverage, andit might eventually terminate the policy for failure to paypremiums and report your lack of coverage to your state'sDepartment of Motor Vehicles. This can hurt your credit ratingand your ability to get a new policy.Be sure to get a new policy first Always have a newpolicy in place before canceling your old auto insurancecoverage. You don't want to have a gap in protection for evenone day. Fortunately, there is little danger of this happening.Most states require all drivers living within their borders tocarry a minimum level of auto insurance. So, most insurancecompanies now require policyholders to present proof of newcoverage before they will cancel an active policy. You may needto show your old carrier copies of a new insuranceidentification card or the Declarations Page of your new policy.Your new company will be able to time the onset of your newpolicy to coincide with the cancellation of your old coverage.When to switch policies The best time to switch autoinsurance carriers is just before your old policy is about torenew. This will allow you to avoid paying for printing andstart-up expenses the company incurs as part of the policyrenewal process. You also avoid the inconvenience of figuringout the amount of any unused premium that should be returned toyou.A renewal notice will be sent to you approximately a monthbefore a new policy period begins, depending on the regulationsin your state. The notice will describe your coverage,discounts, and the amount of premium you owe. Should you decideto switch policies, you'll need to line up a new policy by thetime your current policy renews, although most states allowabout a month after renewal to switch. If you miss the deadline,you may end up paying a cancellation penalty.You don't have to wait until renewal All standard autoinsurance policies contain a provision giving you the right tocancel your policy at any time, once proper notice is given tothe insurance company. You don't necessarily have to wait untilrenewal time. Cancellation after a policy has renewed is mostconvenient at the end of a payment cycle. That way, you're notforced to deal with recovering the unused portion of your paidpremium. But if you choose to cancel in the middle of a cycle,the company will prorate your latest premium payment up to thecancellation date and return the remainder to you. However, aspecial "short rate" (cancellation penalty) will be deducted topay the administrative costs of renewing the policy.How long does it take to switch? When you switchcompanies, your new agent or insurer can execute the change inas little as one day. You'll need to provide a cancellationdate, your former agent's name, and the name of the insurer. Itwould also be helpful to show your new agent a copy of the oldpolicy's specifications page in order to match the coverage.Please note that this description/explanation is intended onlyas a guideline. For more information about auto insurance please go to: Insurance.com
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