Insurance renewal time provides drivers with the perfect opportunity to make sure they’re getting the best deal on car insurance. While you can shop around any time for car insurance quotes, there are several good reasons why renewal is the perfect time to compare your current policy with what’s available elsewhere.
Renewal Rate Increases
The thing that most often sends drivers in search of new insurance quotes is finding a rate increase on their renewal. Rate increases can happen for a variety of reasons; you may have had a ticket or an accident, the insurance company may have made rate changes to your policy in particular, or there may have been a general rate increase to all of the company’s policies. No matter what the reason, seeing your rates go up is a good sign it’s time to shop around.
While a ticket or accident will follow you to another insurance company, they may not charge you a much for the same incident as your current company. Even those with a strike against their record can save by shopping around. A rate increase on your renewal is not something you have to accept, and there is something you can do about it: look to other companies.
The Benefits of Switching on Renewal
When you choose to shop around and potentially switch to a new insurance company on your renewal date, you save yourself more than just the difference a lower premium can make. There are a few major benefits to making renewal time your chance to move to a new company.
First of all, insurance companies often charge penalties for cancelling your policy in the middle of the policy term. Some companies don’t charge a penalty but will use a system called short-rating in which the money refunded to you is not the fully pro-rated amount you should get back. This is another way of penalizing you for ending the policy before the term for which it was rated. When you switch to a new company on your renewal date rather than renewing your old policy, you avoid any risk of penalties or short-rating.
In addition to avoiding the penalties of early cancellation, you also make it easy on yourself when you change companies on renewal. You will simply pay the new company rather than renewing with the old. This keeps your payments steady and right when and where you expect them and have planned for them in your budget.
When To Start Shopping Around
Your current company will send you renewal paperwork a few weeks prior to the actual renewal date for your review. As soon as you have that information in your hands you should start comparing quotes. With the copy of your current policy at hand, you will know exactly what coverage you are receiving now so that you can get quotes for the same level of coverage.
You will also have your new premium on hand so that you can easily see how other companies’ rates compare. By comparing apples to apples on coverage, you can be certain that a lower rate really is a better deal, and not just lower because the coverage is lower.
Shopping around right when your renewal paperwork arrives also gives you the most possible time to make a decision on whether to continue with your current company or switch. Remember that you will need to either take out a new policy or pay for the renewal with the new company by the date on your renewal paperwork, or you could find yourself uninsured.
If You’re Not Ready to Switch
While renewal offers a great opportunity to shop around, that doesn’t mean you have to switch then. If you don’t find a better deal at renewal time, you can still go back and look at rates in the future. Shopping around doesn’t mean you have any obligation to switch insurance companies, so if you decide to stay where you are you haven’t lost anything.
You can shop around at any time during your policy term, although renewal is often the best time. Getting quotes is always a great way to keep up to date on what is available to you; it may be that the current policy is the best choice, but taking the time to get quotes can give you the peace of mind of knowing you have the best deal on car insurance.