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How to switch car insurance
Get quotes and switch your insurance to a new provider the easy way.
How do I switch car insurance companies?
It’s easier to switch car insurance than you might think, and you could save a lot of money on premiums. If your rates went up or you have a new car, now could be a good time to compare rates and decide whether you should shop around or stick with your current insurer.
It’s might seem like just a simple matter of cancelling one policy and taking out another, but to make it more seamless, it’s helpful to consider a few tips when you do.
- Decide that you want to look at other options.
- Know whether you want to switch or renew based on how much you could save.
- Compare car insurance online to find a new policy that’s right for you.
- Pick the right time to switch to avoid cancellation fees.
- Have a new policy set to start the same day your old policy ends.
- Notify your current insurer that you will not be renewing your old policy.
Before you switchRead the product disclosure statement or contact the insurance company to familiarize yourself with the cancellation process and know how long it takes. Make sure you tell your insurer you are cancelling your policy, because if you just fail to renew it without contacting your insurer, you might be considered in default and could end up with a black mark on your credit record. Sometimes your new insurer can help you cancel your old policy by providing a default cancellation letter template you can sign, print and mail.
How do I switch car insurance mid-policy?
Some circumstances may force you to change insurers before your current policy expires. You could be changing jobs, changing locations, changing drivers, changing cars or you may have just found the deal of a lifetime and you can’t afford to wait.
- Contact your current insurance provider or go through the product disclosure statement to find out what’s involved in cancelling your insurance mid-policy. You need to know how to cancel, when the cancellation takes effect, what the associated fees and costs are and whether you will get any refunds.
- Decide on your new policy. You should have a replacement policy that you’re happy with ready to go before cancelling your old one. Compare the savings or additional benefits of the new policy with the cancellation fees of the old one to make sure it’s worthwhile. Refunds usually take time, so don’t plan on paying for the new policy with a refund from your old one.
- Sign up for the new policy and then cancel the old one. If possible, try to have your new policy take effect as soon as the old one ends, without any gaps between.
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Tips for changing car insurance
- Is the switch going to be worth my while? Make sure it’s worth the effort by looking at how much you could save versus the administration and cancellation fees you may be charged. If you’re only saving a couple of dollars on your premium, you might be better off waiting until renewal time before you switch car insurance.
- Is my current insurer willing to try to keep me? Before you switch insurers, keep in mind your no claims discount or accident free discount may not be transferable. If you let your insurer know you’re shopping around, you can often ask for a loyalty discount. Many companies are happy to do this if it means keeping customers, particularly ones who have been loyal for many years and not made any claims. You may be pleasantly surprised at what your provider has to offer if you give it a chance to match a better deal.
- When is the new policy’s activation date? Check the activation date on your new policy and make sure it is before your old policy expires.
- When should I cancel my old policy? Cancel your old policy at the end of a payment cycle, so that you don’t have to worry about refunds or cancellation fees.
- Should I change insurer every year? Unless it’s getting you a good discount, loyalty is overrated. If you can find a better deal with another insurer, let your current insurer know and see if is is willing to match it. If not, make the change. Other than the hassle and loss of loyalty discounts there’s no reason not to switch car insurance every year if there’s a preferable option out there.
- Is the cheapest policy right for me? Don’t base your reason for switching on price alone. Make sure any new policy you look at offers the right coverage as well. A cheaper policy might be problematic if it’s not as good as your old one.
- Should I review my coverage each year? Yes. Make it a habit to review your car insurance every year before renewal time. You will often see premium increases at this time, as insurers usually count on customers renewing their policy automatically each year without comparing other options.
- I have car insurance already, will it cover my new car? You will typically need to take out a new policy for a new vehicle, but it’s typically pretty easy to switch policies to a different car with your current insurer.
- Should I switch policies after an accident? Be careful about switching car insurance policies after an accident. Your claims history is available to your new insurer, meaning you won’t necessarily get a clean slate by switching car insurance. But having an accident certainly qualifies as a changed circumstance, so you might want to take the opportunity to shop around anyway.
Can switching car insurance save me money?
Being able to go online and compare car insurers means that you can save a lot of money by playing the field. If your current insurer won’t offer you a better deal or match a quote you’ve found, then tell it you’re thinking about switching car insurance policies. If that doesn’t get you a better deal, then it might be time to go, or consider one of these other ways to save.
- Review your current level of coverage. Reviewing your current level of coverage is a great way to save some cash. If you have kids under 25 or you yourself were recently under 25 and have not yet updated your policy, you could be overspending on your insurance. Your car itself may be overvalued on your current policy (ie, the replacement value of your car may have decreased), so making sure your details are up-to-date will help you avoid paying too much.
- Know the different coverage options. When you’re switching car insurance policies, it’s important to understand the options available to you. Choosing a higher excess, for example, will lower your premiums. Being protected against reasonable hazards and making constructive claims for damage is generally how you get the most out of your car insurance policy, rather than always going for the cheapest option.
- Review your coverage every year. If the answer is no then you could be wasting hundreds of dollars each year. Always check how your policy compares to others in the market. If you want to save money, there’s no reason to renew car insurance without comparing other options first.
- Compare insurance after a life-changing event. Life-changing events are a good time to review your car insurance. Getting married, having a child or purchasing a home can affect your policy.
When should I switch car insurance?
The average driver shops for new car insurance every 12 years. But comparing quotes from different companies is the best way to save on car insurance. And most drivers save up to $500 by switching.
It’s probably time to start shopping if you answer yes to any of these questions.
- Are you unhappy with the current level of service? Common issues with service include: too little or too much communication, terms and conditions not clearly stated, problems when making a claim, unhelpful customer support or difficulties with offshore call centers, being penalized for a no-fault claim.
- Do you want better value for your money? It’s important to reassess your needs each year when you renew your policy. Your insurance may have been great value for money when you first got it, but premiums and circumstances change and this may no longer be the case.
- Have your circumstances changed? Maybe you have a new young driver raising your premiums, you’ve moved to an area with a higher or lower crime rate or you have a different source of income now. A lot of things will affect insurance costs and needs, so changing car insurance policies is a good way to adapt and find better prices.
- Are you eligible for discounts? You may now be eligible for discounts that your current insurer doesn’t offer. These could be multi-policy discounts for getting multiple products from the same insurer, freebies that come with a new policy, periodic bargains or anything else that looks tempting.
- Is your current policy the cheapest on the market? It may be as simple as that. New brands enter the market all the time, and offering low prices is a great way for them to steal customers away. Letting yourself get stolen by a competitor might lead you to a great deal.
Even if you feel like none of the above applies to you, it’s still worth comparing car insurance providers. It’s reasonable to assume that there’s almost always a more competitive deal somewhere, and that you just need to find it.
What isn’t my insurer telling me?
Knowing how the industry operates can help you in your search for a better deal. The following are some things that your insurer won’t necessarily tell you, but that are useful to know.
- They know if you lie on an application. Insurers share information among themselves, so don’t lie about your claims history or driving record.
- Your car value’s not based on its actual value. Insurers calculate the replacement value of your car based on the cheapest quote they can find, so you might find different valuations from different insurers. If you are unhappy with your insurer’s valuation, get quotes from 3 different dealers yourself and submit them to your insurer.
- Your car’s covered but its contents aren’t always covered. Personal items such as stereo systems aren’t usually covered by your car insurance. If stolen or damaged, try claiming them on your house and contents insurance instead.
- Loyalty isn’t always rewarded. To attract new customers, many insurers offer them better deals than their current customers are getting. To find out if that’s the case with your insurer, apply for a quote online as a new customer and compare it with what you are currently paying.
- Your premiums could go up for no reason. Most insurance renewal statements do not list last year’s premium amount, so make sure you look at your last renewal and compare what you were paying then with what it is asking for now. Once you do, you might be surprised to find that your car insurance premiums have been going up without you realizing.
Is it bad to switch car insurance too often?
No, you can’t really change car insurance too often. Insurers might see on your record that you change insurers every year or even every few months, but you won’t be penalized for switching. You’ll also save a lot of money by switching, so there’s really no downside to comparing quotes every year.
The only time it’s a bad idea to switch is if you’ll have a lapse in insurance because you didn’t set up your new insurance to start at the same time as your old insurance ended.
Another consideration before switching is cancellation fees. Most providers don’t charge any fee and will send your refund for any premiums you’ve already paid. But if your current provider charges a fee, or you need the money back before you can open your new policy, it’s typically a better idea to wait to switch until your policy is up for renewal.
How can I negotiate a better deal with my current provider?
If you’re considering switching but haven’t made the decision yet, let your current insurance company compete for your business. You might be able to get a better deal on your current rates by letting your provider know you’re shopping around or found a better rate somewhere else.
Consider the best way to get informed and talk to your current insurer.
- Check your current coverage levels. What coverage limits are listed on your current policy? What other perks do you get like no claims bonus or roadside assistance?
- Decide on any changes. Make sure you have the right deductible and coverage amount you need for your state plus any additional coverage you want.
- Get quotes from competitors. Compare other providers who offer the level of coverage you need at a better price.
- Call your current provider. You can try contact forms and online chat, but it may be faster to ask about discounted rates over the phone. Armed with competitor quotes, remind your insurer how you’ve been a loyal customer and ask if there’s any way to match the competitor quotes you found.
- Try again with another rep or make the switch. If the first person you talk to can’t help you, you can try contacting again and hope you get someone who is authorized to reduce your premiums. If not, it might be time to cancel.
Switching car insurance isn’t as difficult as it sounds. Follow a few basic steps to make sure it’s the right move for you, then work with your current insurance company to find out its unique fees and switching process. You could save a bundle by switching to a company that works better for you.
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