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How to Switch Car Insurance Companies

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  July 3rd, 2019  By Danika Miller

It’s normal to be curious about whether your current car insurance company is the best one for you. Before you jump the gun and switch to an insurer whose quirky commercial caught your eye, there are a few ways to ensure you’re making the right decision.

Why switch your car insurance?

There are a few reasons you might start shopping around for a new auto insurance policy. Sometimes it’s a sour taste left after a poor claims experience, or perhaps simply the search for a better rate. Generally speaking, if your circumstances change that’s usually a good time to shop around. For example, as you get older, are married, add teen drivers to your policy, or switch to a hybrid car, you may find a different provider caters better to your new circumstances.

“It pays to shop around every few years, as getting older, improving your credit score or keeping a clean driving record for a period of time, can all impact your car insurance rates.”

Jamie Page Deaton
Executive Editor, U.S. News Best Cars

Work with an independent agent

If you don’t already have a relationship with an independent insurance agent, we recommend looking into your local options. Insurance agents can do much of the shopping around for you, and easily compare rates from multiple insurers. They can keep tabs on competitive rates even when you aren’t actively looking to switch. And if you do decide to change auto insurers, you can keep your established relationship with the agent.

Double-down on discounts

Switching car insurance companies is the perfect time to qualify for new discounts. Some discounts are easy earns, like going paperless or signing up for auto-pay. This could also be a good time to update your car with some safety features for additional discounts — like anti-lock brakes, an anti-theft device, additional airbags, or daytime lights. Enrolling in a driving course, purchasing a home, adding multiple cars to your policy, and installing driving habit technology can also discount your premiums.

Financial advisor Elizabeth Lundstrom told us to “Look for companies that offer a discount for alumni from your college, or other groups you belong to.” There are also insurance companies that specialize in servicing certain individuals, like farmers or business owners, with unique endorsements and exclusive discounts. Lundstrom also noted that frequent travelers will want to look for insurers with great rental car coverage. We encourage shoppers to think outside the box about things that might qualify them for better premiums.

When we spoke with Joel Ohman, a Certified Financial Planner, he pointed us towards affiliate programs discounts. “Many large Fortune 500 companies offer various discounts to their employees if they purchase a policy through a preferred insurance provider.” Check with your employer and other memberships for exclusive affiliate discounts — especially if these circumstances might have changed since you last shopped around.

Switch sparingly

Sometimes, it can actually pay to stay with your insurer, too. Lundstrom told us, “Insurance companies like insurers that stay, so they often get lower rates if they were with their previous insurer for years. Three years is recommended as it’s a sweet spot of rate and discounts changes and not affecting your insurance score negatively.” It looks good to your current insurer and your future one if you have a track record of loyalty. Switching more often than every three years or so could actually hurt your insurance score and premium rates.

Allow a few days overlap

If you’ve decided to switch car insurance companies, it’s best to make sure the new policy overlaps a few days with the end of your old policy. Jamie Page Deaton, Executive Editor of U.S. News Best Cars, elaborated — “If there’s a day or two when one policy ends and another starts, you’re on the hook for any damage that happens on that day. And if you drive without an insurance policy you’ll be breaking the law in many states. Having a lapse in coverage can also trigger higher rates, so plan for some overlap.” When changing car insurance providers, it’s best to check for any contract breaking fees, wait for your renewal time, and allow for at least one day of overlap before your new policy begins.

When should you stay with your current car insurance company?

Keep in mind, you’ll want to hold off on leaving your current insurer if you hold multiple policies with one company. If you purchased a home and auto policy from the same insurer, and cancel your auto policy, your home insurance rates could be affected by losing any multi-policy discount.

Elizabeth Lundstrom, a financial advisor, also warned us, “Do not switch companies if you know you have moving violations or accidents that haven’t yet affected your premiums.” When you apply for a new policy, these records are pulled and you’ll be quoted for pretty high premiums. You should also stay with your current provider if there are any unresolved claims still being processed.

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