Tuesday, September 13, 2016

5 Mistakes to Avoid When Switching Auto Insurance Companies

Auto insurance is ranked as the third highest expense of owning a vehicle, which means auto insurance can be a significant amount of your budget. While it makes a lot of sense to shop around and make sure you’re getting the best deal out there for your circumstances, no one can afford to make these mistakes that can have a detrimental effect on your finances.

Mistake #1: Not telling your current insurance agent

It may seem like an awkward conversation to have, but it’s incredibly important that you contact your current auto insurance agent before you switch to a different company. A professional agent will handle your call in a businesslike manner and may even be able to offer benefits that are not available to you as a new customer somewhere else. Take advantage of your agent’s expertise with the company you are currently with so that you are making a fully-informed decision. Also, your agent can review the lower-priced auto insurance quote (always get insurance quotes in writing) to make sure you are getting a comparable policy. 

Mistake #2: Not making sure your new policy is in place before dropping the old policy

If you don’t make sure your new policy is active before the old policy ends you could find that there is a gap in your coverage, which could be a costly mistake if something happens. Furthermore, letting an insurance policy lapse could signal risky behavior to an insurer, which could translate to higher insurance rates in the future.
If your original company sends a notice of renewal and you simply ignore it could create a costly problem because your policy won’t be cancelled right away. Rules vary by state, but in general there is a period of time where an auto insurer is required to give a grace period for nonpayment, which you then are still required to pay the premium. Paying that double premium could present a hardship for policyholders on a tight budget.

Mistake #3: Not getting a refund for the coverage you won’t use

If you paid for your auto policy up front you may be entitled to a refund for the portion of the coverage you won’t be using. For example, if you paid for a 6-month policy up front but decide to switch after only 3 months, you are entitled to a refund for the remaining 3 months. Sometimes insurers don’t make it easy to get back what you’re owed, so it is to your benefit to follow up and make sure the insurer refunds you the money you are due.

Mistake #4: Forgetting to switch out your new ID cards

It’s so easy to forget to change out your old auto insurance ID card for your new one. With the ease of digital downloads and the ability to print your own ID cards, making the change can be an easy task to put off. But, if you’re pulled over and don’t have valid proof of insurance, you could face a fine, or at least an inconvenient trip to traffic court to prove you have coverage. 

Mistake #5: Not notifying your finance or leasing company of the change
It is important that you notify your finance company and/or leasing company of the change of insurance provider and the amount of your insurance coverage. Part of your responsibility is to ask your new insurer to send proof of insurance to the leasing company as well as to you.

Please feel free to contact us for a free quote!  If you decide to switch to our agency we take all the hassle out of switching for you by handling it for you - notifying the carrier, agent, lein holder, providing you new ID cards the same day you switch and even advise if you should expect a refund or not.


Got something to say? Join the discussion »
  1. Zequek Estrada's avatar Zequek Estrada
    You're probably right that it's easy to forget to change out your old auto insurance ID card. It's usually simple things like this that are easy to overlook. It's why when I change things, I do it all at once so I don't have to worry about it. http://www.bozemaninsuranceagency.com/auto-insurance-get-a-quote.html
    Reply Thursday, November 3, 2016
  2. Ben Allen's avatar Ben Allen
    I appreciate the tips on what to do when switching auto insurance. I definitely agree that it is important to have your new policy in place before you cancel your old one, if there is any lapse in coverage and you get in an accident it can cause a problem. My mom is debating on switching her insurance company, I will be sure to share this information with her. http://www.jmiquote.com/insurance
    Reply Thursday, December 1, 2016
  3. Maxine's avatar Maxine
    I really like what you said about making sure to switch out your ID cards. Knowing me, I would go through the whole process of changing insurance companies, and then forget to switch the cards. The last thing anyone needs is going to traffic court to prove you were covered! http://www.cpbinsurance.com/Auto-Insurance-Winchendon-MA.html
    Reply Tuesday, January 17, 2017
  4. Mark's avatar Mark
    Glad to see I am not the only one that never thought of changing over the ID cards, recently changed my commercial vehicle insurance and realised one day the card did not match what I thought was the right card but wasn't. Changing it straight away if I do this in future.https://quotedevil.ie/commercial-vehicle-insurance
    Reply Friday, March 24, 2017
  5. John Ferrell's avatar John Ferrell
    You said that we need to contact our current insurance agent before we switch companies. If I was going to switch companies I would want to make sure that everything is taken care of with the old company. Maybe I should get a professional quote so that I can find the right insurance. http://montanafirst.com/types-of-insurance/auto-insurance/
    Reply Wednesday, April 5, 2017
  6. scott's avatar scott
    I had no idea that you could be entitled to a refund if you paid for coverage you didn't use. I can see why this would be something to be aware of if you were to pay for coverage upfront. My brother is going to be paying for his own auto insurance this year. I'll have to remind him of this as he chooses his plan.
    Reply Friday, April 21, 2017
  7. John's avatar John
    It really helped when you talked about making sure your policy is in place before you change insurance companies. My parents are thinking about switching companies but I don't think they have planned this yet. As I see it, It always helps to have someone you can trust to help you with a process like this since it can save you a ton of stress when leaving and getting insurance. http://www.unitedcountiesins.com/
    Reply Thursday, April 27, 2017
  8. Maxine Wilson's avatar Maxine Wilson
    My husband and I are thinking about switching to a new auto insurance. I hadn't thought about talking to our current company about getting a refund for the coverage that we don't use. It's also a good reminder to talk to your agent, and making sure you don't go without insurance. We've had the same insurance for so long, we need all the reminders we can get! http://wolfinsurance.com/personal-insurance/auto-insurance/
    Reply Tuesday, May 2, 2017

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