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How to Switch Car Insurance Companies

In today's information age, greater transparency amongst car insurance companies has made it easier to compare quotes. The allure of a better package makes changing providers very attractive, but it is important to ensure that such changes are made safely and efficiently. A gap in coverage can have consequences even if you don't have an accident during that period, and careful timing may be necessary to avoid extra costs during the transition. So long as you stay aware of all the moving pieces as you start planning to choose a new insurance provider, you can avoid any extra costs and pitfalls.

Reasons to Change Auto Insurance Companies

Over the lifespan of a car insurance policy, several substantial changes can happen in your life, especially if you've been with the same company for many years. You may see significant changes in the quotes you're currently being offered, depending on a variety of factors including but not limited to:

  • Marital Status
  • Home Ownership
  • Credit Score
  • Geographical Location
  • Age & Years of Driving Experience
  • Annual Mileage

Every insurance company uses their own weighted metrics to determine what they quote. Even if you give the same information to a dozen different companies, you may see dramatic shifts in offers depending on your unique profile.

Know When to Switch

The best way to avoid any foreseeable problems when switching car insurance companies is to schedule it in advance. Three weeks to a month before your current plan's renewal date gives you ample time to research other policies and promotions you may qualify for. Once you've decided, you can buy a new policy before the old one expires, ensuring a seamless transition of coverage. Not having a gap keeps you protected in the event of an accident, traffic police, or possibly state penalties.

That doesn't mean you have to wait. Sometimes abrupt changes are necessary, and if you have a long time before your current policy's renewal, you may want to cancel for the sake of savings. An early cancellation must be done in writing: it isn't enough to simply stop paying because you could be reported to your state authorities. Be mindful of any cancellation fees, and if necessary weigh them against the discount you may be getting from the policy you want to switch to. If you cancel in the middle of a billing cycle, you should also receive a prorated bill for that month and get the difference refunded back to you.

Keep Sight of Downsides

It's easy to get swept away by a good deal at face value, so take care that you aren't getting less for the discount. Longevity with many companies comes with perks. You may already be receiving a large discount on a broader list of benefits, or if you've bundled your car insurance with your home or health insurance, you may lose a discount on both that strips away the benefit of changing one. You may have further discounts on the horizon with your current company or a thick safety net of accumulated accident forgiveness and safe driver rewards.

Alternatively, the car insurance market is a competitive one, and your new company may be offering benefits for transfer customers. There are plenty of deals that are just as good as they seem without any hidden drawbacks that appear after you sign.

Research, Plan, and Research Again

Switching to a new car insurance policy is deliberately uncomplicated. There are a lot of fantastic deals that are meant to draw new customers in immediately. By taking a little time to compare policies and identify your own needs, you can get a great policy that both saves you money and keeps you protected. If you know what you're doing, you can make your coverage transition as simple and cost-efficient as you please.