Whether because of a bad experience, a change in location, or your rates keep going up, everyone contemplates changing their car insurance from time to time. Shopping for car insurance is not a bad thing; it guarantees that you receive the best rate, maintains good discounts, and ultimately gets the service and experience that you deserve.
While there is no shortage of insurance companies, there are a few things you should be mindful of when switching insurance companies. The experts at Affordable Car Insurance are here to help with seven mistakes you should when switching car insurance companies.
Know What Your Policy Includes
Look over your current policy carefully before fully engaging with a potential new insurer and take note of how much everything costs. Look at your benefits, riders, discounts, and your coverage. All of this can be found on the summary page of your policy. Also, take note of what things you used and did not use. If you have Roadside Assistance through the dealership, you don’t need it attached to your insurance policy as well. Removing that benefit could save you some money over the lifetime of your policy.
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Be mindful of your premium amount (what you pay monthly) and deductible amount—how much you pay before the insurance company starts to pay. If you can, try to lower your premium without increasing your deductible. That will allow you to save money, not just monthly, but also in the event of an accident.
Know Your Coverage Limits
Cheap car insurance is not always better.
Check and double-check your coverage limits and be mindful over coverage add ons. It is more important to have the amount of coverage you desire (and are required to have) to pay a lower premium. Starting out with a lower premium and adjusting your coverage afterward could end up being a lot more expensive than if you had maintained the right coverage limits, to begin with. Always compare your current policy’s summary sheet with the new company’s quote. When you switch, you don’t want to leave anything on the table.
Don’t Forget to Cancel Your Old Policy
Although the underwriters of insurance companies gather information concerning your driving and insurance records, they do not cancel your policy for you, and the start of a new contract does not guarantee or signify the end of the old one. Writing a letter with precise dates as to when your policy should end is the best way to make sure your current policy ends on time, and the new policy starts on time. Be sure to ask for written confirmation of your request.
Without notifying the insurance company, they may continue to charge your monthly premium, or if you or fail to pay the premium, it could possibly end up on your credit report. Proactively contacting the insurance company and notifying them of the switch prevents you from being further billed, and it keeps your credit score from taking a hit for the delinquent account.
See also: Windhaven Insurance Tampa
Don’t Forget About Your Partial Refund
We all know that paying your car insurance premium in full for the six month coverage periods saves us a ton of money. We save on administrative fees, and many insurance companies also offer a discount for paying in advance as a ‘thank you.’ However, if you cancel or change your insurance company and/or policy within six months of your coverage, you may be entitled to a refund
For example, if your policy costs $897 for six months but you change/cancel your policy after the first four months, your insurance company would you owe you $299 minus any cancellation or policy change fees they may issue. Normally, receiving a refund isn’t an issue; however, if it takes longer than what seems necessary, remember to be polite, yet firm, and persistent. Keep a written record of all of your conversations and ask for all agreements to be put in writing.
Avoid Gaps in Insurance
When switching your car insurance, it’s important to make sure that there are no gaps in your coverage. Having a gap in your insurance not only looks irresponsible to insurance companies, but it also makes you responsible if something happens within that period where you don’t have any insurance. Also, if your previous insurance company reports that you have canceled your policy and another company hasn’t been listed, the DMV can charge a fine or suspend your license for driving without insurance.
Switch Out Your ID Cards
If you’re changing insurance companies, you’re going to have a new policy number. Be mindful and proactive about changing out your insurance ID cards. Not having a current policy ID can turn into a pesky day in court and a few fees if you get pulled over.
TIP: Many insurance companies provide electronic versions of your ID card, when you switch, download the new ID card to your phone (Apple Wallet or Passbook for Android) to hold you over until you get your new cards in the mail. Don’t forget to shred your old ones.
Notify Your Lien Holder
If you financed your car, your lienholder might have specific insurance requirements that they demand you meet. When changing your insurance company and/or policy, don’t forget to send the lienholder a copy of the new policy so that they are aware of the changes.
There is nothing wrong with shopping for a new car insurance or switching your car insurance; you just want to make sure that you do it correctly. In addition to these seven things that you should avoid, don’t forget to read the company reviews. Make sure you’re making the right decision by reading what other customers think about the company. Pay attention to complaints about the company paying out, claim processing times as well as customer service complaints. Switching to the wrong company could be more stressful than staying with the current one.
Lastly, remember to drive carefully during your first 90 days of the new policy, insurance companies use this time as a probationary period to determine if you’ll be a reasonable customer risk or not. Getting into an accident or getting a speeding ticket could cause them to drop your policy or raise your premiums. So take it nice and slow and enjoy the ride.
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