Guide to Switching Insurance Companies

Switching insurance companies can be a brilliant move. Contrary to what most believe, it is not as complicated as it seems. And it can even save you insurance money or get you better coverage. 
By how exactly do you navigate the switch? Insurance is vital. And you do not want to find yourself on the road without valid insurance. The fines, financial burden, and mental turmoil that you can incur are not worth the risk. Here is the A- Z of switching car insurance companies. 

When should you switch to another insurance company?

You are not tied to your insurance provider forever. As a result, you can switch to a different company anytime. Some life situations that may leave you with no choice but to choose a different insurer include:

If you are moving to a new province, city, or ZIP code

Your current insurer may not provide insurance services to the new location. And changing car insurance companies may be the only solution. Similarly, if your insurance company provides the services to the new location, you may need to shop for more competitive coverage. 

When experiencing a life-changing event

Life-changing events such as buying a home, getting married, or retiring can impact your insurance needs. This is the best time to update your insurance and shop around for a better provision. 

When adding a new car

Insurance rates for a new car will differ from what you were previously getting. Your insurer will consider factors such as the car model or price. This is the best time to switch to a new provider especially if you feel short-changed with the value you are getting from your insurance provider. 

Adding a new driver to your insurance policy

If your teenager has just acquired a driving license, it is imperative to add them as a secondary driver in your policy, more so if they will be using the vehicle. Listing a secondary driver can impact the insurance rates, and may necessitate changing insurance companies. 

When your insurance renewal date is approaching

Insurance can be expensive. And you may be on the constant lookout for better deals. While you can switch to a new insurance provider anytime, it is more convenient to do so during your renewal period. Switching insurance companies mid policy means you may have to incur additional fees. 
As we mentioned, you can change your insurance anytime. However, if you just filed a claim, switching car insurance companies is not a good idea. This is because it may be impossible to change carriers. And if the claim has not been paid yet, your insurer may wrongly rate your policy, leading to a higher premium. 

How to navigate the switch to a new insurance company

1. Check the available coverage options among different insurance providers

If you are switching insurance companies due to the high cost of insurance, you may be tempted to pick the cheapest option that comes your way. And it’s understandable given the high cost of insurance. However, you need to ensure that you get sufficient coverage. Too little coverage will leave you financially vulnerable. Also, too much coverage means that you will pay for insurance that you do not need. 
If you do not have a specific provider that you want to switch to, getting quotes from different providers puts you at a better chance of getting a great deal as you get to compare the coverage options, premiums, and discounts. You can also get recommendations from colleagues, friends, and even family members. 

2. Check for additional coverages 

Before settling for an insurance company, check the availability of additional coverages that you may need. Add-ons such as roadside assistance or engine protection are vital. However, not all customers purchase them. Ensure you opt for an insurer who provides the additional insurance. While additional insurance provides more coverage, it will lead to an increase in your premiums.  

3. Check for potential penalties before switching insurance companies 

While most insurers allow users to cancel their policies anytime, be on the lookout for fine prints in your policy such as penalties or fees charged for switching before the lapse of the coverage period. Also, check if your provider has any cancellation stipulations. If you find that your insurance provider will charge a penalty for switching insurance companies mid-policy, you can wait till the expiration of the policy to switch to the new provider. 

4. Ensure you leave no room for a lapse in coverage

As you are searching for a new insurance company, you need to avoid a lapse in insurance coverage. This is why we advise that you get a new provider just before the expiry of your old policy. A gap in your coverage can lead to serious legal and financial consequences, especially if you are involved in an accident. Driving without insurance, even for a short period can negatively impact your insurance rates since insurance companies will perceive you as a high-risk driver. 

5. Ensure that you terminate your old policy

Most people assume that their insurance policies automatically get canceled if they fail to pay their premiums. If you signed up for auto-renewal insurance, you may be reported to credit bureaus for non-payment. Regardless of how bad the experience may have been with your old insurer, alert them of the policy cancellation once you get a new provider. This will prevent you from being billed for future payments. While different insurers have varying regulations, ensure you get the termination confirmation in writing. 

6. Go through the fine print of the insurance policy

Switching insurance companies is not complicated. However, insurers have varying terms and conditions. And some of these can be difficult to understand. It is important to get help from a person who is well versed in the insurance sector. Ensure you check the fine print and search for inclusions and exclusions, as well as other issues that can hinder compensation once you make a claim. 

Final thoughts

Changing car insurance companies is a great move. And it is sometimes necessary. You get to enjoy better prices, enhanced coverage, and better insurance services in general. However, the switch should not be made blindly. Take your time and shop around for a new provider. Also, ensure that there is no lapse in coverage, lest you may incur costly legal and financial consequences.