Switching Car Insurance Companies

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Lots of people decide to switch car insurance companies in Ontario and Canada. One of the most common reasons for doing so, is because they have found cheaper rates with another company.

Other common reasons for switching companies include:

  • The auto insurance owner is relocating
  • The insurance company raised their rates and have become unaffordable
  • Children in the home will need coverage soon, and other policies are more attractive for this situation
  • Poor customer service

Oftentimes, the act of having to switch everything over is worth the money that will be saved.

For those people who want to leave their current car insurance company and use a new one, the following steps might be helpful:

  1. Find a New Insurance Company

 It is best to have already decided on a new car insurance company, before leaving the current one. This helps to make sure that there is no delay in coverage when switching.

The customers who shop around ahead of time are usually the ones who find the best rates. It might seem time-consuming, but comparing auto insurance rates can help to find out who offers the best policies at more affordable prices.

People should ask for quotes at the same coverage level as they have now. This will make it easier to compare the companies fairly.

Some websites provide quick and easy access to auto insurance companies all over the country. However, these numbers are usually a ballpark and the rate will change depending on the person.

When it comes time to find a new insurance company, being picky is a good thing. The best auto insurance company will be accommodating and fast to complete your request.

  1. Auto Insurance Cancellation Penalties 

Before canceling any kind of policy, it helps to know what to expect. Some companies may have a smooth process, while others might charge extra fees.

Companies that prorate will look at how much time is left on a policy, and refund the person for those months. For example, a person who cancels in month 10 of their 12-month policy will get 2 months of premiums back.

In comparison, some companies charge a cancellation fee for not lasting the entire policy. This is known as a “short-rate”.

If the difference in payments is fairly significant, then it is likely worth it to pay the fee. However, if they are not, then it may be best to stay with the current policy until the end of the current term.

People are encouraged to find out about their cancellation process, to decide which option is best.

  1. Canceling Your Auto Insurance

No one wants to have to pay for their auto insurance twice. Double-checking that everything has been done correctly, can save a whole lot of stress and money.

Those who are canceling their auto insurance policy will want to get everything in writing. Some companies don’t request this, but it’s good to have on file.

People are encouraged to take note of when they requested their policy be canceled, and when they asked for the cancellation to take effect.

The most important thing is to ensure that when one policy ends, the other has already taken its place. Without proper organization, some people have their old insurance canceled before their new one begins, or they realize the new premiums aren’t what they thought.

This often leaves people scrambling for coverage, or paying more than they wanted to.

Is It Bad to Switch Auto Insurance Companies?

switching company

A lot of people tend to switch their auto insurance fairly often. They do this in order to get the best rates. There is nothing wrong with switching companies regularly, so long as it’s done properly.

Some of the mistakes people make when switching auto insurance include:

  • Not informing the insurance company that they’re canceling

By neglecting to inform the old insurance company about canceling, a company will continue to bill the person. If they do not pay their bills, the company may report them to the credit bureau.

Not only will the person owe a lot of money, but they might also obtain a much lower credit score.

  • Having a lapse in coverage

If the cancellation and activation of insurance are not set for the same date, people can be exposed to a lapse in coverage.

At this time, the person is liable for anything that happens, such as getting into a car accident. Drivers pay out-of-pocket in this case.

By being diligent and taking the right steps, it is not harmful to switch auto insurance companies.

Conclusion

When it comes to switching car insurance companies, it’s helpful to read the fine print.

Leaving one company might mean losing some of your benefits, including discounts that have been earned or Accident Forgiveness.

A person who has more than one insurance policy might consider switching all policies over to the new company. This way, they may be able to benefit from new discounts to help with the expenses.

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