How To Switch Car Insurance Companies

It may be easier than you think!

There can be many reasons why you would want to move your car insurance cover to a different company. You might have changed jobs and are eligible for a group discount through another insurance company, or perhaps you are unhappy with the level of customer service that your current car insurance company offers. Perhaps you have found an alternative car insurance company willing to offer you the same level of cover for less money. Nowadays, most car insurance companies provide 24-hour quick online insurance quotes via telephone or websites, so investigating your options has never been easier.

Why switch to a new car insurance company?

Have regular reviews your car insurance cover to ensure that you are receiving the best value for money. You'll discover that it pays to shop around. In some cities, premiums for identical policies vary widely among different companies. The reasons for this price variation can be very complicated, but they boil down to a company's claims experience with policyholders in your coverage group (e.g. people of similar age, how many accidents, types of vehicle). For example, if a large number of people in your social group make insurance claims during a given year, your car insurance cost will be likely to increase. When this happens, better discounts and reduced premiums may be available at other companies. When you decide to switch your car insurance to another company, you'll find that it's fairly easy to do so.

How to cancel your old car insurance policy

Generally, all you need to do to cancel your car insurance policy is to inform the insurance company in writing, specifying the date you want the policy canceled. Some companies ask that you send back the actual printed insurance policy. Your insurance company will send you an insurance cancellation request form that you should sign and return. Examine the form carefully to make sure that all information regarding your policy is accurate. If you do not receive such a form within two weeks of sending your letter, call your broker or the company immediately to check on the status of your cancellation. Don't just walk away from your old policy without formally canceling it. Otherwise, the insurance company might assume you wished to continue your coverage, and it might eventually terminate the policy for failure to pay premiums and this could find its way onto your credit rating. This can hurt your credit rating and your ability to get a new policy.

Be sure to get a new policy first

Always have a new policy in place before canceling your old car insurance coverage. You don't want to have a gap in protection for even one day. Fortunately, there is little danger of this happening. 

When to switch insurance policies

The best time to switch your car insurance company is just before your old insurance policy is about to renew. This will allow you to avoid paying for printing and start-up expenses the company incurs as part of the policy renewal process. You also avoid the inconvenience of working out the amount of any unused premium that should be returned to you.

A renewal notice will be sent to you approximately a month before a new policy period begins. The notice will describe your coverage, discounts, and the amount of premium you owe. Should you decide to switch policies, you'll need to line up a new policy by the time your current policy renews.

You don't have to wait until renewal

All standard car insurance policies contain a provision giving you the right to cancel your policy at any time, once proper notice is given to the insurance company. You don't necessarily have to wait until renewal time. Cancellation after a policy has renewed is most convenient at the end of a monthly payment transaction. That way, you're not forced to deal with recovering the unused portion of your paid premium. But if you choose to cancel in the middle of a cycle, the company will prorate your latest premium payment up to the cancellation date and return the remainder to you. However, a special "short rate" (cancellation penalty) will be deducted to pay the administrative costs of renewing the policy.

How long does it take to switch car insurance?

When you change car insurance companies, your new insurer can execute the change in as little as one day. You'll need to provide a cancellation date, your former providers' name, and the name of the insurer. It would also be helpful to show your new agent a copy of the old policy's specifications page in order to match the coverage.

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