Is it a bad idea to change auto insurance?

Nowadays, it seems that everything related to cars costs more. Auto parts are getting more and more expensive, gas prices are skyrocketing day by day and you might have noticed that your car insurance has also increased. In this case, is it a good idea to change auto insurer?

Switching auto insurance providers could save you money

A photo of an auto insurance policy. | Unsplash

In short, yes, it’s a good idea to shop around for different car insurance rates. Different carriers will have different rates for your specific car, age, driving record, etc. So it’s a good idea to call and check what other car insurance companies have to offer. According Market watchShopping around for different car insurance rates can not only save you money each month, but it won’t hurt your credit either.

The best part is that you can switch auto insurance companies midway through your policy period without cancellation penalties or other fees. Plus, switching auto insurance won’t affect how insurance companies view you as a customer either. You are allowed to shop around and change every year if needed. However, do not cancel your current auto insurance policy until you find a new one. Breaking coverage can result in penalties or even a damaged driving record.

How to change car insurance

A driver nonchalantly drives his Honda CR-V

A driver nonchalantly drives his Honda CR-V. | Unsplash

If you’re considering changing auto insurance companies, it’s a good idea to shop around at least once a year to find the best rate. Once you find another insurance company and a rate that suits you, switching is a fairly simple process.

Here are some easy to follow steps according to Penguin of Valor:

  • Compare the prices: The first step is to shop around for a better rate. In doing so, it’s important to take your time and find the right combination of low premium cost, helpful coverage options and attentive customer service. This last part is important because you’ll want to make sure you can reach someone in case the worst happens or you need to find a simple answer to a question. Remember to consult three to five different insurance companies before pulling the trigger on a new policy. Also remember to ask for available discounts and call your current insurance company before changing to see if they can match the rates.
  • Cancel your current policy: Once you have found a new insurer, contact your current insurer and cancel your contract. You should get a refund for any coverage you didn’t use.
  • Tell your lender: If the car you are driving is leased or financed, you need to let your lender know that you have changed insurance companies. Since every car lender requires you to have car insurance, they can repossess your car or provide you with a separate policy if they think your insurance has been voided.

Why would you change auto insurance companies?

A driver places his hand on the steering wheel.

A driver places his hand on the steering wheel. | Unsplash

The number one reason you would want to switch car insurance companies is to save money on your premium. Another reason to change is if a life situation changes. For example, if you bought a new car or added another driver to your policy, it makes sense to look elsewhere for a lower rate.

Even if you’re not looking to switch carriers, as mentioned earlier, it could save you a lot of money each year by checking different rates on a yearly basis. In the worst case, you can keep your current policy.

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