Over 3 million insurance quotes
Compare Quotes from 30+ Car Insurance Providers and Save
Compare Quotes from 30+ Car Insurance Providers and Save

Loyalty and Your Car Insurance Company: When It’s Time to Move On

September 4, 2013

Insurance Company LoyaltyLoyalty is an important backbone of any relationship, but it’s not always one you want to have when it comes to your car insurance. Stay loyal to the one you love, but not necessarily to your car insurance company; there may be a better deal out there for you and it may be time for you to consider seeing someone new.

Loyalty and Insurance

Car insurance companies offer loyalty discounts to help keep their people in the fold, but that doesn’t mean that it’s always the right thing to do. In many cases, you can save a lot of money by going somewhere else, even if it means giving up that longevity discount you get for sticking around.

When comparing insurance rates, it’s important to take into consideration all of the factors, not only the rate. Loyalty to an insurance company should be something they earn with more than just a discount. Strong customer service, attention to your policy and needs, and good claims service are all important things to consider about your car insurance company when you’re deciding if you should move on.

The Cost of Leaving Vs. the Cost of Staying

Many people choose to stay with their insurance company because of the potential cost of switching. While it’s true that there can be some costs involved in making the move, it’s important to get a realistic look at what they are and whether they actually outweigh the cost of staying where you are.

Leaving your insurance company in the middle of the policy term can cost you. Some insurance companies won’t charge you a penalty for an early cancellation, while others do something called short-rating in which they don’t return to you the full unearned premium. Take into consideration any down payment the new company requires before you make your decision.

That doesn’t mean you should wait until the renewal date to make the break; in some cases you can still save money overall simply by moving on now and not waiting until later. Consider how much you will pay for the duration of your policy term and compare it against the new policy with all fees and penalties added in. You might be surprised to see that you still come out on top by changing right away.

You should also consider other potential costs, such as loss of accident forgiveness waivers. If you have had an accident with your current insurance company that fell under accident forgiveness, that forgiveness won’t transfer to a new company, so you may be charged for the accident.

Shopping Around for New Insurance

It’s important to remember that there is no obligation whatsoever to shopping around for a better rate on car insurance. Thanks to online quoting it doesn’t take a lot of time, and if you don’t find a better option, you can stay right where you are.

When you’re shopping for car insurance quotes, be certain that you are comparing policies offering the same coverage. In some cases a new policy can appear to be a better deal only because the coverage levels are lower. It’s also a good idea to take some time to research the insurance company and find out how they do with customer satisfaction. That way you can be sure that you are making the right decision, one you won’t regret.

When to Make the Switch

If you’ve done your research and determined it’s time to move on to a new insurance company, you can ensure a smooth transition by following a few simple steps. First, apply for the new policy and make certain that everything is in place before you cancel the old policy.

Check with your current insurance company to find out what their procedure is for cancellation. Some will accept a cancellation over the phone, while others may require it in writing. Some insurance companies will even take care of notifying your current company for you when you sign up for a new policy, so you don’t have to worry about it.

Loyalty to a company can be a good thing, but only when you are benefiting from the relationship. If you could benefit more from starting a new relationship than by sticking with the old, it’s time to make the switch.