Switching auto insurance providers can be a tall order for many people, especially those who aren't big fans of change. However, making the switch to a new provider could result in lower insurance premiums and better coverage options. It's important to recognize and avoid the five mistakes that could make it difficult to switch insurance providers.
Not Reviewing Your New Coverage
Your new auto insurance policy might be cheaper, but it could have lower limits or weaker coverage than your old plan. Before you switch, go over your new insurance policy with a fine-tooth comb. You'll want to check and compare coverage types, limits, and deductibles between your old and new policies. Watch out for unexpected reductions in liability coverage, as well as missing policy perks and features.
Forgetting to Cancel Your Old Insurance Policy
Once you have your new policy in place, you'll need to proactively cancel your old one, pay any leftover fees, and get written confirmation of the cancellation. If you simply stop payment on your old policy, it'll remain in effect and your old provider will continue to bill you for the coverage. Fail to pay up and you could end up with an unpaid debt and a collection attempt on your credit report.
Creating a Gap Between Your Old and New Coverage
Canceling your old coverage before your new coverage becomes active can leave you in an insurance gap, where you won't have any liability protection in the event of a crash. In addition, even a small gap in your coverage could cost you extra money, as continuously insured drivers are often entitled to lower rates than those who have a gap in their coverage history. To avoid coverage gaps, make sure your new policy is set to begin immediately after your old policy ends, or even a little before.
Failing to Notify Your Finance or Leasing Company
If you're financing or leasing a vehicle, the lender or leasing company should be kept abreast of any changes made regarding your insurance, including any changes in your insurance provider. If you decide to switch providers, make sure your new provider forwards proof of insurance to your lender or leasing company as soon as the new policy is active.
Not Being Reimbursed for Prepaid Coverage
If you're the type of person who prefers paying upfront for insurance coverage, then you may be entitled to a refund of your remaining coverage once you switch providers. Your insurance provider may deduct cancellation fees from the total amount you're owed back. You can put this money towards your new insurance coverage - or you can have a little fun with your small windfall.
Contact a company like Plumer Insurance Agency to learn more.