If you are planning to switch car insurance companies, you might be thinking how you could possibly do that and if you will have to deal with fees in order to do so. Switching to another insurance company is not really that hard as many would think.
You must regularly review your car insurance coverage to see if you are getting the best insurance for the worth you have to pay with your money. Premiums for identical coverage can differ greatly in most states and in different insurance companies. There are many factors why the price of policies can be different. An example would be regarding the company’s claims experience in a certain coverage group. If for example you belong in a group where the rate of claims is very high in a given year, you might end up paying more for your policy. If this happens in a company, you may choose another company who can give better discounts and give lower overall premiums.
The reasons why you need to switch car insurance company may be dependent on how happy you are with the performance of the company. You may not have been satisfied with their customer service or you simply have found another company that is willing to give you the same level of coverage for a lesser price. There are many sources available to you in order to check if you are still getting the best deal for your car insurance.
What You Need to Know About Switching Insurance Companies
1. Be certain to get a new car insurance first- You must have a new policy in place before having to cancel out your old insurance coverage. You have to do this because you do not want to have a lapse in your car insurance (not even for a day). The new insurance company you choose will be the one to time the onset of your new policy to correspond to the cancellation of your new coverage.
2. When is the time to switch policies- It is greatly suggested that you start shopping for insurance 3 to 4 weeks before the renewal of your old policy. You will receive a renewal notice approximately one month before your new policy begins (this will also depend on the regulations of your state). The notice will explain your coverage, discounts offered and your premium amount. You can use this information to compare prices and features when shopping online.
3. Do not wait until renewal- All standard car insurance policies contain a condition that gives you the right to make a cancellation of the policy at any given time once you give proper notice to the provider. There is no need for you to wait for renewal time and it makes more sense to cancel a policy before it is renewed since you will not have to worry about getting back the unused portion of the paid premium. Choosing to cancel in the middle of a cycle will give the company the privilege to prorate your latest premium up to the cancellation date and return the remainder to you.
4. Extra fees- There are some insurance companies that may charge a special cancellation fee in you choose to cancel in the middle of the policy term. Be sure to ask your provider if they fine for such fees. You must weigh the costs of the cancellation fee before you decide to pay. If you can earn the money back with future benefits and discounts from the new provider you are eyeing for, then you can go ahead and pay for the fine.
5. How to cancel old policy- All you have to do is inform your car insurance provider of your intent to cancel and put this in writing. Indicate the date when you want the policy to be terminated and state your reason for cancellation. If the reason for cancellation is due to the sale of your car, the company may ask you to offer a bill of sale if you are asking the company to backdate the cancellation. If you your reason is you are switching companies, there is no need to prove this unless you opted to cancel the policy in mid-term.
6. Old company will ask for your new policy- In most states, they require insurance companies to confirm that you have with you a new policy before they could go on with the cancellation of the old policy. The reason behind this is that insurance companies need to report policies that have been cancelled to the state insurance department so that the authorities have a record of uninsured drivers. This in turn helps lower the number of uninsured drivers. The old provider will be liable to report you as an uninsured driver if you were unable to present proof of a new policy.
7. Confirmation that you cancelled- Wait for a confirmation. Policies are continuous and they are automatically renewed every six or twelve months. Should you fail to cancel your policy, the insurance provider will keep on billing you for insurance and you might end up having to dispute your case. You should receive an official cancellation notice stating the date and time when your policy will stop. This will serve as your proof that the cancellation was processed.