How to Avoid These 5 Mistakes When You Switch Car Insurance
Whether you want to switch car insurance companies due to poor customer service, because you plan on moving, or to find a lower premium, it’s in your best interest to avoid some of these common auto insurance mistakes.
Letting Your Coverage Lapse
One of the most common auto insurance mistakes people make when switching companies? Creating a coverage gap. When moving to a new insurance company, make sure that your new policy picks up where your old one ends. This requires a little coordination on your part, but it basically requires you to end the old policy and start the new one on the same day.
A gap in coverage can also affect you if you decide to switch insurance companies again at some point in the future. When looking at your risk factors, an insurance company does look at continuous coverage. Any gaps in coverage can rate you as a higher risk, leading to a higher premium.
Failing to Find Out What Your New Policy Covers
Failing to make sure you have the proper coverage when switching insurance companies is among the most common auto insurance mistakes. When comparing what companies have to offer, make sure you get the same amount of coverage you currently have for a lower price.
Otherwise, you might find out after the fact that you don’t have the exact coverage you want. This can actually cost you more, as you must then spend extra to increase your coverage. The result? You could end up paying more than you paid under the old policy.
Forgetting to Ask for a Refund from Your Old Insurance Company
You may be owed a refund on your old insurance policy if you prepaid for future months. Don’t forget to ask about your potential pro-rated refund. Before switching, call your car insurance company and make sure you know exactly how much you should get back when you switch, if anything.
You should also check to see if the company imposes any penalties for ending coverage early. If the company delays refunding you, make sure to follow up with them.
Not Cancelling Your Old Policy
Once you have made the switch from one company to another, you need to make sure that you cancel your old policy. One of the repercussions of failing to cancel include your old company sending you to collections for non-payment.
Notifying the company in writing represents the best solution. In addition, make sure that you get confirmation, also in writing, from the company about the cancellation. Leaving a paper trail, or at least an email trail, can help protect you if you encounter any confusion when moving from your old insurance company to your new one.
Forgetting to Notify Your Lender About the Change
If you own your car, you do not need to notify anyone that you switched car insurance companies. On the other hand, if you owe money on your car, either through buying or leasing, you need to notify the lender that you switched car insurance companies. Most lenders require that you carry additional coverage, in the form of comprehensive and collision, as the lender wants to ensure that the car has the proper coverage while you pay it off.
By avoiding the above auto insurance mistakes, you can ensure that switching policies from one company to another goes smoothly. If you’d like someone else to take care of all these details, you can have Jerry work on your behalf.