If you have recently felt the pressing need to change your car insurance provider, you should know you’re not alone. In the previous year, many car insurance policyholders in the United States experienced an increased rate, according to J.D. Power. This situation has left many auto insurance policyholders unhappy with their car insurance costs. Luckily, there’s a solution: you can change your auto insurance when you want to.
Things You Should Consider Before Leaving Your Current Car Insurance Provider
Getting a better rate is likely the most common reason why policyholders try to change their car insurance providers. You might have other reasons why you want this change, but there are a few things you should consider before deciding. You should assess the type of car insurance you currently have.
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It is also essential to review the coverage amounts you carry on the policy and your deductibles. If you are not satisfied, you can go ahead and change to a satisfactory insurance provider.
When You Can Switch Your Car Insurance Providers
Changing your car insurance provider on your expiration date is a good move. You will be able to avoid paying for double coverage, cancellation fees, and a long period of waiting for a refund.
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When you want to add or remove a driver (e.g. your teen) to your policy, you can look for and change to an insurance provider with a lower rate.
More Reasons For Switching Your Car Insurance
As a policyholder, you might have bought an umbrella policy for your home and car insurance. When you move into a new house, you have the opportunity to change your car insurance policy too.
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When you move to a new state or city, you can get a new car insurance provider. Insurance law varies from state to state; they have different insurance companies with different rates, too. This can make your chance of car insurance easy.
Guidelines on How to Change Your Car Insurance Provider
- Check around for new rates
You can compare the car insurance rates of various insurance companies before making a decision. You can make calls, reach out to insurance agents or use online tools. You can also check the insurance discounts of these insurance providers.
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- Establish a new policy
Once you find an insurance company with car insurance coverage that you like, you can go ahead and establish a new policy and do all the necessary paperwork.
Further Guidelines
- Cancel your old policy
Before you take this step, make sure to verify that your new auto insurance policy is active. This will help you avoid the hassle of having a gap in coverage, which could lead to penalties from your state.
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- Inform your lender
Maintaining car insurance is part of a loan or lease agreement. Therefore, if you change your auto insurance provider, you should notify the lender or leasing company of your car to avoid negative consequences.
Mistakes You Might Make When Switching
It is not advisable to switch during an active claim. It could cause an increase in future rates. Your new insurance company would need all the information necessary to assess your risk level as a customer. If they don’t get complete information, you might have to go back to your old policy and face new increased premiums.
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Also, if your new insurance provider notices any discrepancies, like an outstanding at-fault claim, your policy could be cancelled.
More Mistakes
If you have had a DUI conviction or a series of at-fault accidents, you may find it challenging to get a new insurance company that would want to work with you.
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In this situation, you can look for insurance companies that specialise in high-risk insurance. You can also take safe-driving courses to avoid more accidents and DUI convictions.
Cancelling Your Old Insurance
After establishing a new insurance policy and you have verified that it is effective, you must notify your old car insurance provider.
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You should also submit a cancellation request in writing, and to make things final, you can follow it up with a phone call. Failure to cancel your old insurance coverage might result in you paying for two car insurance policies at once.
Penalties
You should note that if you cancel your old car insurance policy before the new one is entirely in place, you might be penalised. Your state DMV could cancel your driver’s license if it looks like you’re going without coverage. Make sure your new insurance company notifies the state about your new insurance coverage.
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You should also know that you might be charged early cancellation fees or penalties if you change insurers before your policy expires.