Is Switching Car Insurance Companies Bad?

Motorists may believe that changing auto insurance companies will cause glitches or companies will check their records and penalize them for not being loyal. On the contrary, insurers often encourage shopping around and switching. It is just part of the business and motorists will not be charged more for switching companies and their claims won’t be handled differently if they make any in the future.

They can switch as many times as like, even mid-policy as long as they have continuous coverage, which is the only thing insurers check. They won’t be black listed, face higher rates in the future or lose much money in the process. Their credit score won’t be affected either. Most quote forms are designed to offer prices without the need to check credit scores at this stage. And any credit score check by an auto insurer is a soft pool that doesn’t affect the overall score.

There is absolutely no problem with changing your car insurance at each renewal, which is a pre-agreed interval designed to give both the insurer and policyholder a chance to check everything again and make sure they want to continue with the arrangement. Every company is well aware of this fact and it is their fault if they cannot offer you a good enough renewal terms.

There is no downside to replacing an auto insurance company at renewals if you aren’t fully satisfied, even if you have an open claim. They will have to process it to its full conclusion because it concerns the past term. However, it is generally not a good idea to leave a company mid-term in the middle of a claim proceedings.

Most companies don’t charge for mid-term cancellations. And some may charge a small fee or retain a percentage of remaining premiums but these won’t amount to much. Often people will be able to save enough in the process of switching to another vehicle insurance company that paying a minimal fee won’t matter.

People would only replace their automobile insurers willingly if they find a better coverage, cheaper price and more reputable company and all those reasons can only be good. So, there is hardly any reason to even wait for the next renewal to make the move if you found a better deal somewhere else because most of the renewal quotes are coming higher than before these days anyway. Just notify your current insurer of the date you want to cancel your policy and make sure the new policy starts as the old one ends.

Often motorists are under the impression that loyalty will pay and they will be treated differently once they have a claim because they have been with the company long enough. The fact of the matter is that they won’t even check how long you have been with them. You paid the required premium and you are entitled to all the benefits your vehicle insurance policy can offer you, just like everyone else.

In fact, there may not be any good reasons for staying with a company if you aren’t getting a good deal or service. Most companies are highly reputable, offer similar packages and follow industry standards for issuing policies and dealing with claims. Their reputations are on the line and they cannot really pick on policyholders as they please.

You can be insured with Allstate, State Farm, Nationwide, Progressive or twenty other highly reputable companies and you won’t notice much of a difference. Besides, most policyholders decide on the level of coverage they like, get several quotes, pick one, pay the premium and forget about it for at least six months and often more thanks to auto-renewals. How could they know the difference?

Most motorists don’t even get alternative quotes for several years even though they are advised to compare prices at least once a year. It is easy to check auto insurance quotes, especially online and people may lose out big time if they stay with an expensive provider for years.

Studies show that the number one reason for changing companies is bad service. Lately premium hikes are probably the second reason and finding better deals somewhere else already is the third. There are many encouraging reports that people are now checking for better prices and switching when they find better deals because they don’t feel that they should accept unexpected premium hikes.

And they may actually be forced to find alternative car insurance coverage due to circumstances as well. Moving out of state is one of those reasons since they are required to arrange a new policy that complies with the requirements of their new state. Needing to add a teenage driver often pushes policyholders over the edge because they shop hard to find affordable premiums and bring their costs down a bit.