It is important to point out that car insurance policies come with terms and conditions. One important condition almost all policies have is that policyholders must inform their insurer of material changes in their circumstances. Generally, anything that may affect your vehicle insurance rates is a material fact like changing address, vehicle and having a new driver in your household. Sharing this information with your insurer keeps your policy up to date, relevant to your current situation and makes sure that your claims aren’t denied because you lack coverage or are accused of material misrepresentation.
Often motorists may not realize the importance of updating their automobile insurance policies, forget about it or may worry that their premiums will increase if they say anything to their insurers. It may be true that your premium may go up at times but you may potentially save money too depending on the change. Besides, if your premiums increase excessively, you always have the option to explore other car insurance providers that align better with your updated information.
Often there are grace periods for informing your insurer of material changes in your life and these periods may change depending on the information, company and state. Usually, the sooner the better. Otherwise, you should check how long you have before you have to inform them. Typically, telling them later doesn’t really help you much since they would adjust your premium from the date the change took effect.
1. Change of Address
Your zip code is the first thing vehicle insurers ask when you are getting quotes because it is a significant factor in premium calculations. You may start paying less or more with your new address and it is only fair that your premium is recalculated after the move. There is no upside to not telling your insurer about the address change. If your new address means that you pay less for car insurance, you would be losing out for not getting the savings as early as possible. Otherwise, you may be accused of deliberately withholding material information if you have a claim and you have not been living in your old address for some time. In the best-case scenario, you would pay all the premiums the insurer missed since your moving date. In the worst-case scenario, your insurer can deny your claim citing the wrong address on the file, depending on how long it has been since you moved and the company.
2. New Driver in your Household
If someone has just moved into your household or someone reached driving age, you should inform your insurer to make sure they are insured properly. This may result in increased premium but not sharing this information can result in claim denials if they drive the car and cause an accident. In the same way, if someone moves out of your home, you may actually save money on car insurance. This information is even more significant if your teenage child comes of driving age and starts driving your automobile. Teenagers are considered high risk and may potentially increase your auto insurance two folds.
3. Using your Vehicle for Business
Your car insurance policy typically doesn’t cover business use. So, it is important to tell them when you start using it for business. If you are occasionally running work related errands with your personal vehicle, you may be able to add business use to your auto insurance policy. But you may need different arrangements or even a business car insurance if you start transporting passengers or goods in your personal automobile for money. It is important to get the right coverage for the business activity you are carrying with your car to make sure you have liability coverage for such activities and your vehicle is insured properly.
4. After an Accident
While this may not be necessary for minor accidents, especially if there are no other cars or people involved, it’s crucial to contact your insurer promptly in cases of injuries, anticipated high repair costs or suspicions of fraudulent activities. If you call them immediately, they can assist you in documenting the scene of the accident, advise you as to what information to gather and start the claim process immediately. In case of injuries, insurers almost always want to get involved as quickly as possible to assess the situation.
5. Change of Vehicle
Details of the car insured significantly affect the premiums charged. Also, it may affect the coverage you need, especially if you replaced your old car with a brand new one. Although, usually there is a grace period for informing your insurer of change of vehicle, you should inform them as soon as possible. This will result in recalculation of premium but you don’t normally need to buy a new policy when you switch cars on the policy.
6. Modifications to Your Car
Enhancing your vehicle significantly can potentially lead to an increase in your auto insurance premiums. Nevertheless, it remains crucial to notify your insurer about these modifications to ensure you maintain appropriate coverage. These upgrades may include alterations to the engine, adjustments to wheels or suspension, internal sprucing, and works done for easy access. Sharing this information makes sure that the modifications are noted on the policy and you have coverage for them too, even though it may cost you more.
7. Changes in Driving Habits
When you start driving less or more you should inform your insurer. For example, retiring, starting to work from home, moving closer to work may actually save you money on your vehicle insurance because you drive less. Always discuss the significant changes that affect your yearly mileage with your insurer or agent. Also, you should look into alternative car insurance quotes and policies that may be more rewarding in your changed driving patterns. For example, you could consider a pay-per-mile vehicle insurance policy.
8. Additional Security
If you decided to install additional security like an anti-theft device or a feature like dash-cam or rereview camera to your vehicle, you may qualify for discounts.
9. Taking a Defensive Driving Course
These courses may qualify you for auto insurance discounts depending on the company and state. In most states, these savings are offered to drivers over 55 and young drivers but several states may allow other age groups to save money as well.
10. Other Material Changes
Things like getting married may affect your policy arrangements since you may need to add your spouse to your policy. Also, you may be able to get a discount from some companies after marriage or buying a home. These are easy discounts and you shouldn’t miss them.
In addition, it may be a good time to review your vehicle insurance coverage requirements after such changes and get a few quotes with your updated details. Often these adjustments are significant enough to make your current insurer less competitive. So, you should always take these opportunities to shop around. This is more so if you see significant premium increases after you share the information with your current automobile insurance company.