Content of the material
- What are the reasons to switch auto insurers?
- 3. Compare car insurance quotes from multiple carriers
- Things to Consider before Switching Car Insurance Provider:
- What is tiered pricing for auto insurance?
- How to cancel health insurance
- Reasons to Switch Car Insurance Companies
- How to switch car insurance in 5 steps
- 1. Shop around
- 2. Purchase the best policy
- 3. Cancel your previous insurance
- 4. Get your proof of insurance
- 5. Let your lender know
- 8. Print out your new car insurance ID cards
- Advantages of Changing Car Insurance Provider:
- Our methodology
What are the reasons to switch auto insurers?
There are many reasons to shop for and change insurers. The number one reason is to save money, but switching coverage can do more for you than just benefit your pocketbook.
- You Just Moved – If you move locations, especially to a new state, your old auto insurer may not be authorized to sell coverage in your new state.
- Your Company Just Raised Your Rates – Whether your rates went up for no reason or you just filed a claim, any time your insurer raises your rates is a good time to shop the market for lower rates.
- Your Last Claim was Denied – A claim denial can cause you to feel financially insecure, especially if you cannot afford to repair or replace your car. Switching companies can help you find a company with better customer service that can give you the peace of mind you need.
- You Will Soon Have a Teen Driver – Adding drivers can cause your rates to increase. When you add a driver, including any teen drivers, you should shop the market to see if a different insurer will provide you with the additional coverage you need while not causing you financial hardship.
Is switching insurers bad? Not if your current company is not fulfilling your needs.
3. Compare car insurance quotes from multiple carriers
If you have decided it’s a good time to change carriers, the first thing you might want to consider doing is getting quotes from several different auto insurers. The Insurance Information Institute (Triple-I) recommends you get a minimum of three quotes when shopping for your coverage. This will allow you to compare auto policy premiums, coverage options and discounts. Just make sure you are getting quotes for the same coverage, so you are comparing apples-to-apples premiums. Whether you are getting quotes online, by phone or at an agency, you’ll likely need to be prepared with some basic information:
- Address where the car will be stored
- Vehicle year, make and model
- Vehicle Identification Number (VIN)
- Driver’s license or Social Security number (auto insurers will use this information to review your motor vehicle record and any other personal factors that might affect your premium, such as your credit-based insurance score in some states)
As you are researching companies, you can also review available discounts. Asking companies to include all the discounts you qualify for on a quote could help you to find cheaper coverage.
Learn more: Average cost of car insurance
Things to Consider before Switching Car Insurance Provider:
The most common mistake people make while selecting an insurance company is to make haste while getting their car insured. As a policyholder, you need to invest some time in analysing your requirements and how good an insurance company is. If you are confused about switching to a new insurer then the following points will help you make a clear decision:
If you realise that you are paying more premium for fewer features, then it is time to change the insurance company. Take a look at the current coverage of your car insurance policy. Do you have to pay more money than the insurance coverage you are receiving in case of a claim? If yes then look for a new insurer.
2. The Quality of Service
One should be free of worry with respect to car insurance when he/she has chosen a good insurer. The overall quality of service will help you decide if you want to switch an insurance company.
3. Customer Service
Are the customer care executives of the current insurance company well trained to guide you through the process or resolve your queries? If you are kept waiting on a loop of automated responses without a proper solution then you should consider switching to a new insurer.
4. Confusing user interface
Nowadays, most insurance companies have an online presence. There are no set guidelines on how an insurance company should design their user interface for a website or a mobile app. This could lead to a bad or an outright worst experience while buying a policy, availing a service, or even while filing a claim. If this is the case with you, then consider changing the insurance company.
5. Lack of additional coverages
Additional coverages or Add-ons as they are popularly called, are not necessarily available at all insurance companies. Add-ons like Roadside assistance, Zero depreciation, Engine protect, etc. are very useful for a car owner. These may also help increase the claim amount in some cases. If you need such add-ons, and they are not available at your insurer, then you should change the insurance company.
What is tiered pricing for auto insurance?
Companies analyze years of data and compile this information into a scoring model to determine how large a risk you represent to the company. That score is then fed into a tiered pricing system which then determines how much you’ll pay.
And then there is the insurance company’s pricing model itself. Larger, well-known companies have more overhead and therefore tend to be a bit pricier than smaller, less conspicuous companies.
For instance, most of us can name several insurers right off the tops of our heads thanks to the sheer number of advertisements that we see and hear.
But the costs involved with making that company a well-known name in the industry are passed on to the consumer via higher costs.
Another factor for higher prices is the financial health of the company itself. Companies that are struggling to raise capital tend to raise the prices of their products in order to generate more revenue.
Financially healthy companies can lower prices in order to attract new customers without damaging their bottom lines.
How to cancel health insurance
Unlike enrolling in health insurance, you can cancel your health insurance at any time. (But if you get your health insurance through an employer, you may have more limited choices – check with them for more details). You may choose to cancel your existing plan if you become eligible for health coverage in another way, like through a new job or through your spouse’s insurance plan.
To cancel, contact your insurance provider or the health insurance marketplace where you purchased your plan. You can usually either cancel immediately or choose a specific date to end your coverage. You may need to fill out some forms to make the cancellation official.
However, it’s very important to make sure you have other plans in place for your medical care. Remember – while you can usually cancel your health insurance anytime, you can’t usually enroll anytime: only during annual open enrollment or a special enrollment period.
Before canceling your health insurance plan, make sure you’ve thought through what you’ll do if you need medical care – and how you’ll pay for it.
Reasons to Switch Car Insurance Companies
“It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options,” says Jon Bloom, vice president of product management at Erie Insurance.
Here are reasons that might merit a switch to a new insurer:
- You had a bad claims experience. Usually we don’t know how good our insurance company is until we make a claim. If you had an unsatisfactory claims experience, you may be looking to jump ship.
- Your policy is up for renewal. As you reach the milestones of life, your insurance needs will change. With this in mind, it’s wise to review your coverage before your current policy renews. If you think you’re overpaying, you may want to switch companies.
- You are buying a new car. When you buy a new car, you want to make sure that it has adequate coverage. For example, you may want gap insurance if you take out a loan or lease, but not every company offers this coverage type.
- You are moving. Where you live impacts the cost you pay for car insurance. But not all insurers price their coverage the same, which is why it’s a good idea to compare car insurance quotes from multiple insurers. And keep in mind, your current insurer might not offer coverage in your new location, so you may have no choice but to switch.
- You are getting married. Most insurance companies offer car insurance discounts for insuring multiple vehicles on one car insurance policy. If you and your spouse have different insurers, it might be the perfect opportunity to find an insurer that offers the best coverage and prices.
- You have a teen driver. Adding a teen to your policy can increase your annual premium by more than $2,000. But not all insurers price teen drivers the same. That’s why it’s worth shopping around to find the best cheap car insurance for teen drivers.
- You are retiring. When you retire, you can kiss the daily job commute goodbye. With fewer miles driven, you may want to look into a non-traditional type of car insurance like pay-per mile insurance.
- Your credit score has changed. In many states, your credit history is taken into account by insurers when pricing your coverage. While drivers with bad credit pay more than drivers with good credit, not all companies hike rates by the same amount. That means you can find a more affordable rate if you compare quotes, even with bad credit.
- You’ve had an accident or traffic violation. Generally, you pay more for coverage if you’ve filed an accident claim or have moving violations on your record. Still, the amount your rate increases will vary by company. You may find a company that has a lower rate than your current one, even with recent accidents or tickets on your record.
How to switch car insurance in 5 steps
Switching car insurance companies is easy, and people do it all the time. However, it’s a good idea to talk with your current insurer and see if there are any cancellation fees. If your insurance agent finds out you want to cancel, they may also offer to search for extra discounts or give you a lower rate.
When you are ready to start looking for new coverage, here’s what to do.
1. Shop around
The first step to switching car insurance companies is to shop around to find a better rate. We recommend comparing rates from at least three providers. An easy way to do this is to use a quote comparison tool. This way, you only have to enter your information one time to see many different options.
When you are shopping around, consider providers that have car insurance discounts applicable to you. For example, State Farm has a student discount of up to 25%, which is better than any other top provider’s student discount. Also, consider usage-based or pay-per-mile programs if you want to save money according to your current driving habits.
Once you’ve identified a few favorite providers, research each company to learn about its customer service and claims experience. We recommend looking at studies by J.D. Power like the 2020 U.S Auto Claims Satisfaction StudySM and the 2021 Auto Insurance StudySM. You can also check out online scores by the Better Business Bureau and financial ratings by AM Best.
2. Purchase the best policy
The next step is to purchase the new plan. If your current auto insurance policy is going to expire soon, schedule the new policy to begin at least one day before your current coverage expires.
Doing this will avoid a lapse in coverage. A gap of as little as one day can increase your car insurance rates in the future, since insurance companies consider you an uninsured driver for that time. It’s much better to have two car insurance policies for one day than none at all.
If you are switching companies in the middle of a policy period, simply schedule the new coverage to begin whenever you would like.
Remember to list your lender on your new policy if you have a loan or lease. The lender is a loss payee, which means that it gets paid first when your car is totaled if you still owe money. You’ll need to get full coverage insurance, which includes collision insurance and comprehensive insurance, if you have an auto loan.
3. Cancel your previous insurance
Once you have your new insurance coverage in place, it’s time to start the cancellation process for your old policy. If you have any open claims, be aware that your old company will still be responsible for investigating and closing out those claims.
Call your company and speak to an agent to cancel your coverage at least one day after your new policy begins. You can schedule an effective cancellation date so you don’t have to remember to call on that specific day. However, don’t just stop paying for your old car insurance policy without officially canceling it.
If you paid for your policy in full at the start of a period, you should get a refund for the unused portion of that period. You might also get a small refund if you paid monthly.
4. Get your proof of insurance
The next step is to print out your insurance ID card or download an app to access it. Most states allow you to show a digital ID card if you get pulled over. However, make sure to save it locally for offline access so you can get to it whether you have cellular service or not.
5. Let your lender know
Lastly, if you have a car loan or lease, you will need to inform the lender right away of your new insurance coverage. Your lender was listed on your old car insurance, which means your old company notifies your lender of the cancellation. You should have listed your lender on the new car insurance policy as well, but it’s also a good idea to call the lender right away to make sure it has all the details of your new coverage.
8. Print out your new car insurance ID cards
Once you have officially canceled your old policy and started your new one, you’ll likely want to switch out your old insurance ID card for an updated one to keep in your vehicle or wallet. If you get stopped by law enforcement or become involved in an accident, you will need proof of coverage under your new auto insurance provider.
Advantages of Changing Car Insurance Provider:
When you feel you are not getting the best services related to car insurance, then switching to a better insurance company is the best option available. The well-chosen insurance company can provide the following advantages:
1. Enhanced Coverage
Car insurance is a financial backup that is helpful in case of an unfortunate event. An insurance company should provide complete coverage as per the policy terms in exchange for the premium you are paying.
2. Better Price
Car insurance comparison can help you buy the right car insurance policy at a lower price. The new insurer may prove to be light on your pocket if chosen correctly.
3. Better Services
A good car insurance company will provide quality services in a timely manner. You may have to follow-up less if the insurance company is dedicated to providing better services.
4. Experienced Customer Support
Customer support executives are considered to be the face of a company. A good insurer will have an experienced customer support team that will help you through an issue and provide the best solution.
5. Better Value Added Services
A customer-centric car insurance company provides useful value-added services like accommodation in case of a breakdown, fast repairs, instant claim settlement, etc. These enhance the “happy-customer” quotient of the company.
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
In this article, we selected companies with high overall ratings and cost ratings. The cost ratings were informed by auto insurance rate estimates generated by Quadrant Information Services and discount opportunities.
*Data accurate at time of publication.