Home & Family Finance
How to Save By Switching Auto Insurance
December 21st, 2017
If you feel you’re spending too much on your auto insurance, switching your provider may save you lots of money. Some people stay with the same insurance provider for years simply because they don’t want the hassle of switching. But that can be a costly mistake. According to Gabbi.com, an online site that helps you sift through insurance packages based on your existing policy, it’s possible to save, on average, $700 per year by switching providers.
Here are some useful tips to find a better rate on your auto insurance and make the switch.
Contact your current insurance provider
Before switching, contact your current insurance provider first. If you tell them you’re shopping for a better rate, they may be willing to offer lower your premiums to keep your business. Your current carrier may also be willing to offer discounts if you have another policy with them, such as your home insurance.
Make sure to shop around and review at least three insurance providers before switching. It’s possible to save anywhere between 5 to 50 percent a year on your auto insurance coverage, depending on the provider you choose.
Check out sites like NerdWallet.com or Insurify.com to compare rates from the top auto insurance providers. Simply share some basic information to find highly personalized auto insurance quotes or rates from the top auto insurance companies. Once you choose a provider, you can then apply online on the insurance provider's website.
Check for cancellation fees and other potential penalties
Before switching your current auto insurance company, find out if your current provider charges fees and other penalties for cancelling a policy before the end of the current coverage period. If given proper notice, most auto insurance companies give their consumers the right to cancel their coverages at any time. However, some companies will charge you a fee for switching in the middle of the policy period. See if it’s worth it to switch your current auto insurance company now or wait until the policy is up for renewal.
Investigate the new company
Do some research on the insurance company you are considering. Make sure the new company not only offers great rates, but also provides good service. You’ll want to know how well the company resolves complaints and pays claims to their consumers. Read online reviews to find out what their customer service is like and if they are easy to deal with during a claim. Check their ratings on the Better Business Bureau (BBB) website www.bbb.org. Look for an insurer that not only offers the lowest rates, but also has the least complaints.
Avoid coverage gaps
A major concern about switching one’s auto insurance carrier is preventing a gap in one’s coverage. Plan your auto insurance switch carefully to make sure that there will be no gap in coverage as you transition to the new company.
Gaps in auto insurance coverage expose you to financial risk if you’re involved in an accident. They can also cause insurance carriers to charge you higher premiums.
Make sure the policy with your new company starts before your old policy is cancelled to avoid any gaps in the coverage.
Cancel your old policy before switching your auto insurance
Make sure to notify your existing company that you are ending your policy and are going with a new company. Then get written confirmation of the cancellation so they stop billing you. Continue paying premiums for your old policy until you get this confirmation. These steps will prevent you from getting reported to credit bureaus for non-payment.
Save by bundling auto insurance and home insurance
If you’re switching auto insurance, ask the new provider how much of a discount you could get by adding another policy, like homeowners’ or renters’ insurance. You can save up to 30 percent by doing so.
Many insurance experts suggest looking for a new policy every two or three years. If it’s time to change your auto insurance provider, the tips will ensure a smooth transition.