Compare Quotes
HomeCar Insurance ResourcesSwitching Car Insurance Companies Step by Step

Is It Bad To Switch Auto Insurance Companies?

change colors

No. It is not bad to switch car insurance companies

This is a question that is often asked by those who either want more from their Insurance companies or want a better price. The time when everyone assumed that all insurance companies were basically the same no longer exists. Many people are becoming more proactive in the way they have to spend their money on necessities. Vehicle insurance is one of these. In Canada, it is mandatory to have car insurance for drivers.

What is important is that the switch is done in the right ways. Also, for the right reasons if you are going to go through this process.

How Do I Switch Car Insurance Companies?


Changing insurance companies is a decision-making process.

Whenever making an important decision it should be an informed one. This means you are going to need to do some research first.

  1. Start with determining what your current insurance is offering you by way of coverage.
  2. When you are sourcing out new Insurance companies what makes what they have to offer different than what you already have. If you are going to switch then you want a company that is offering you more than what you already have. They may have different options but are they going to cost you more?
  3. Look at the policy you have now and determine if you are going to have to pay any penalties. This may be the case if you are switching before it’s time to renew. The penalty costs could wipe out any savings you may realize with your new coverage.
  4. Look closely at the discounts. Most insurance companies offer different discounts. Some have several that they offer. You want to take advantage of these as they can be beneficial in reducing your premiums. What you are doing here is looking at more than just the base premium rates.
  5. Understand what the cheaper policy is going to offer you. If it comes with higher deductibles in order to get a good rate it may not be worth it.
  6. Using the right resources to find a new insurance company is important. There are different types of resources that you can rely on for this, such as
  7. Letting quote finders do the work for you. These services will shop around for the best rates for your insurance. They will do this based on the information they will ask you to provide. Then you can review the choices they come back with and choose the one that suits you best. You can go through a broker. A broker will do similar to what the quote finders will. But, often they do this on a lower scale. They may only be affiliated with a few Insurance companies. This means you will only receive quotes they have obtained from them. You can also ask friends and associates. Find out what their experience has been like with their companies. Do they find the rates go up every year? Do they offer good customer service? How did they respond to claims if any were made?
  8. Notify your insurance company that you want to cancel your insurance. You can do this through your broker if you are dealing with one. They will send you a form to confirm your cancellation. Or, if you are dealing with your insurance company directly they will do the same thing. Be sure that you have your new Insurance in place to start upon the cancellation of your previous one.

Can You Switch Insurance At Any Time?


Yes. you can switch insurance at any time.

However, there are some technicalities that you may have to deal with. They could charge you a cancellation fee. You may also still owe your present insurance company money. This is sometimes common when the insured is paying their premiums monthly or in quarterly installments instead of paying for the year.

The installments cover a certain period of time and usually a grace period. This grace period usually amounts to a few days, not a few weeks. If you have decided you are going to switch companies you may decide not to pay your next installment. You will need to pay for existing coverage until your cancellation of the policy goes through which might take some time. The only way that you are not held responsible for these extra days is if you can prove that you have new insurance in place that you were paying for.

When Should I Switch Insurance Companies?


Switch when you are up for renewal

Unless there is an immediate reason why you need or want to switch from one Insurance company to another. The reason for waiting is that your Insurance company may charge you a cancellation fee.

When Major Changes Are Taking Place

Quite often insured individuals may need to make a significant change to their coverage. This may be the right time to make the switch.

Some examples of this are;

  • You are dealing with an insurance company that has good rates for a single client. But, you are getting married and want to perhaps get insurance as a married couple.
  • You are buying a house and you want to deal with an insurance company that offers better rates for bundling.
  • You are buying a sports car which is considered high end and are now looking for better rates than what you will get from your current company.
  • You are moving from the city to the country and your present Insurance company doesn’t cater to this type of driving environment.
  • You have become eligible for a lot of the insurance discounts and your Insurance providers don’t offer incentives for most of these.
  • You are now going to be adding your teenage son or daughter to your policy and feel that you can get a much better premium rate somewhere else.
  • Be sure that when you are switching insurance companies that you do your homework and get some quotes for the cheapest rates.

Leave A Comment

Continue Reading