People are keen to switch car insurance when they can save a lot of money, find better coverage, and are not happy with their current carriers anyway. Normally, it isn’t difficult or costly to make the change earlier but it may be beneficial to wait until renewal when you can avoid cancellation fees and save more money due to qualifying for more discounts at that time.
Here are the circumstances that may give enough reason for policyholders to wait till their current policy expires;
Cancellation fees are becoming a thing of the pass but a few vehicle insurance companies still charge them. So, it may be better to wait, especially if there isn’t much for the current coverage to run out anyway to avoid paying any charges.
Small savings may not excite people as much already. So, they may not want to go through extra steps of cancelling their current policies and pay fees for doing so. It may make sense to wait until they get their renewal notice and try again to find larger discounts. Companies change their rates often enough to get quotes again.
Advance purchase discounts of around 5% can be utilized when you buy your new policy around 14 days earlier. It could be as much as 10% with some companies. If you have already made your mind about switching to a different car insurer, you might be more organized to get as many discounts as possible when you do.
Having an open claim may complicate things when you want to cancel your existing policy and may appear to be in bad taste. Usually, automobile insurance terms are for only 6 months and it may make sense to wait it out.
A ticket might drop off your driving record or might be long enough for an accident to stop affecting your rates if you wait a bit more. Check the timing and if it is already dropped you might not need to wait.
Timing may be better at renewal. People may get disappointed with their current providers after a recent interaction and want to change vehicle insurance companies now and may have enough reasons to do so like saving money, finding better coverage or a more reliable insurer. However, they may have a bundling or multi-car opportunity when they wait. Or it may cost more and require more work to cancel other bundled and combined policies as well that it may be better to wait and have a clean break at renewal and take all your policies away with you. This would give you a better chance to negotiate.
A significant event happening before the renewal like getting married, moving in with someone or buying a home may warrant waiting and getting more discounts and having the opportunity to shop around for the best auto insurance rates with the new person in your life included in your policy.
You may get more discounts for waiting. For example, you may be able to get around a 9% discount for paying the premium in full. But you might not be able to do that if you already paid the premium in full for the old policy. Yes, they will refund the unused portion of your premium but that money doesn’t come immediately. Or you may be able to better organize your finances, choose the payment date better and manage to pay in full this time and enjoy a large discount and avoid paying installment fees.
It is easy to switch car insurance companies and millions of people do every year. Renewal offers a cleaner and easier break. And people may be better prepared to make the most of all the savings they can qualify for, shop around for the best prices, buy earlier, and avoid fees. Especially if the current coverage is running out shortly, it may be worth waiting.
If the same events play out differently, they may make it pointless to wait till renewal and justify switching auto insurance right now. For example, if a ticket just came off your driving record, you got married, moved to a different state already, don’t like the current provider, are getting better coverage and a large discount for switching today, there is hardly any reason for not doing it now either. Just don’t rush into a decision for a wrong reason and find the most opportune moment for the switch.