What you need to know when switching car insurance companies

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Most financial advisors will recommend comparing car insurance quotes at least once every two to three years. If you can find a significantly lower rate on your car insurance premium while keeping all the coverage you want and need, there are a few steps you should follow to ensure a smooth, hassle-free transition to your new policy.

When should I consider switching car insurance?

If you’ve retained your car and insurance policy for several years with no claims but have seen your premium continue to rise, it’s a good idea to investigate quotes from other companies. Insurance companies may provide loyalty discounts that range between 5% to 25%, so be sure to compare your existing company’s best rates while shopping around.

Other occasions to investigate new insurance rates include an address change, a new car, or family members joining or leaving your policy. Also, if you’re over the age of 21 and having a milestone birthday, consider shopping for a new policy. Age cohorts influence insurance risk and rates, so if you’re entering a new decade or half-decade of life, you may be able to find better rates from a different company.

It may sound counterintuitive, but if you’ve received a ticket or had a minor collision, you can also check for better rates. You may find another company willing to provide a better deal — despite having experienced a driving mishap.

Is there a best time to change car insurance policies?

The best time to change policies is on or near the time your coverage is scheduled to renew. You can switch your auto insurance policy in the middle of your coverage period; however, some companies may charge a cancellation fee. If you cancel your policy mid-way, you will usually receive a pro-rated refund of your premium, representing the number of days of coverage you haven’t used, minus any cancellation fee.

Which steps should I follow when I’m ready to switch car insurance?

If you’ve found a company that offers the coverage you need at a better price, you should time your switch so that you begin your new policy the day your current policy expires. This ensures you have auto insurance at all times.

Check your current written policy to ensure you’re following all the required steps to switch. Then, contact your insurance company and request written confirmation of your final date of coverage with your old policy. Confirm the start date with the company providing the new policy to make certain there are no gaps in your coverage.

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