In recent years, living expenses have remained high, meaning every penny counts. One way to save on expenses is to focus on recurring costs and reduce them, with car insurance being a significant recurring expense that cannot be overlooked but can be lowered.
Comparing quotes from different companies is the first step in switching car insurance, but not the only step. Conduct thorough research to ensure you get the best price for insuring your vehicle.
Every aspect of life seems to have its “details,” and your insurance policy is no exception. Carefully read the details of your current policy.
If you terminate a contract before it expires, the insurance company may charge a fee, so it’s best to wait a bit before making the switch.
In the United States, the cancellation fee for car insurance is usually a fixed amount of less than $100. However, some insurance companies may charge 10% to 15% of the remaining premium. Note down the expiration date on your calendar, as some insurance companies automatically renew policies.
Before discussing quotes with a company, ensure they have a good rating, which assesses the company’s financial strength and how they handle specific difficulties such as economic challenges, increased claims, and financial troubles.
There are multiple organizations that monitor insurance company’s strength, with A.M. Best being the most common and widely used rating agency for insurance companies. Choosing within the “A” range is wise.
Read reviews from other policyholders. While it’s satisfying to see how much money people have saved, the key is the claims process; insurance is meaningful when it provides help when needed.
Check your current coverage. This means carefully reading through, starting from deductibles. Are they high enough? Does the insurance cover rental services after an accident? What discounts are available to you?
Once you’ve determined your current insurance terms, you can start shopping for insurance. If you find that your current policy doesn’t meet your needs, call your agent to inquire about the cost of adding additional coverage to your policy. This way, you’ll know the amount you need to pay and can effectively compare with other companies.
Many car insurance companies offer online quotes within minutes. While a low quote may seem great on the surface, several factors need to be considered.
What is the deductible? If it’s different, ask the new company for the correct deductible before comparing and inquire about discounts. For example, if your child has excellent grades, State Farm Insurance provides a 25% discount. The average discount rate for other insurance companies is 12.5%. Therefore, it’s essential to ask this question if your child is a teenager.
What additional benefits do competitors’ insurance offer? Are they the same or better than your current policy?
If everything goes smoothly, you can purchase the new insurance. Make sure to buy the new insurance before the old one expires or is canceled to avoid any coverage gaps.
Even a one-day gap can cause your insurance premium to increase because you’d be considered uninsured during that time. It’s better to have overlapping policies for a day or two than a gap in coverage.
Therefore, if you’re waiting for your old policy to expire, activate the new one first before canceling the old. If you’re making changes within the policy year of the old policy, activate the new one first before canceling the old.
You don’t want to be stopped by the police without an insurance card, so make sure to immediately print the insurance card and keep it in your car.
Most states accept digital IDs, so you can download the insurance company’s app, but in case your phone has no signal, have a physical insurance card in the car.
Inform your loan provider immediately about the insurance switch. Since the lender is listed on your policy, the old insurance company will notify them of your canceled car insurance.
List the lender in the new policy, and once you notify the insurance company of the lender’s information, they will send insurance proof to the lender. It’s recommended to call the lender to ensure they have everything they need.
There are many reasons to switch car insurance. If you move to another state, you might need to pay higher premiums. If your child is now driving, your premium may increase significantly. You may have gotten married and are now eligible for bundled premiums.
Regardless of the reason, researching the coverage and rates of car insurance is a wise choice and can help you save on expenses.